A monopolist faces two markets with demand functions given by q1 = 120 − p1 q2 = 120 − 2p2 The monopolist has no fixed costs of production, and the marginal cost of production is $10. Suppose the monopolist charges the price $80 per unit of output. What is the market demand at this price? Suppose that the monopolist charges different prices per unit of output in the two markets. How much output is produced? What are the prices? What is the monopolist’s profit?
A monopolist faces two markets with demand functions given by q1 = 120 − p1 q2 = 120 − 2p2 The monopolist has no fixed costs of production, and the marginal cost of production is $10. Suppose the monopolist charges the price $80 per unit of output. What is the market demand at this price? Suppose that the monopolist charges different prices per unit of output in the two markets. How much output is produced? What are the prices? What is the monopolist’s profit?
Chapter10: Monopoly
Section: Chapter Questions
Problem 3QP
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A monopolist faces two markets with demand functions given by q1 = 120 − p1
q2 = 120 − 2p2
The monopolist has no fixed costs of production, and the marginal cost of production is $10.
Suppose the monopolist charges the
Suppose that the monopolist charges different prices per unit of output in the two markets. How much output is produced? What are the prices? What is the monopolist’s profit?
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