Let a Monopolist Face Consumer Group a with Inverse Demand

question 14

Multiple Choice

Let a monopolist face consumer group A with inverse demand P_A = 100 - 2Q_A and consumer group B with inverse demand P_B = 80 - Q_B?. The monopolist can conduct third degree price discrimination, but faces a capacity constraint that Q_A + Q_B ≤ 100. What will be the amount supplied to each of the customer groups?

• A) Q_A = 50; Q_B = 50.
• B) Q_A = 60; Q_B = 40.
• C) Q_A = 33.67; Q_B = 66.33
• D) Q_A = 36.67; Q_B = 63.33

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