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You are a monopolist facing inverse demand for your product given by P = 120 -...

You are a monopolist facing inverse demand for your product given by P = 120 - 2Q and you have constant marginal cost given by MC = 30

A. Assume you can charge 2 different prices based on the quantity purchased. What are the producers surplus maximizing levels of these prices?

B. Show graphically how much more producer's surplus you make by setting 2 prices instead of 1 in this market.

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Answer #1

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