Question

1. A monopolist operates in 2 different markets (selling the same product but different quantities Q1 and Q2), there are 2 marginal revenue functions below in market 1 and 2. Please provide the aggregate marginal revenue function which is the horizontal summation of these marginal revenue functions. (Derive both the function equation, and also the graphical representation of the aggregate marginal revenue). Market 1: MR1=10-201 Market 2: MR2=8-0.5Q2. D Focus o Bt - W X 9

Answer 1

market total ch A monpolist operates in a different market market UI and market (2). MR, y marginal Revenue of the first market, MRęt marginal revenue of the and market. Given in the question , MR, a 10-20, L87 Total quantity sold Mrą = 10-0.592 in the tipet market art Tozal quantity told MR, Represent . in the end slope market, of first Devenire cunve MR₂ is the slope of the and market total revenue eurve. How total nevenue equation of the first market in smr, = S(10-28) [P, is the price of or pigi = 110- seg, the first market. = 109. -2° TR: P , = 10g, -29,4 +0 if we de vide the equation i by 9, we get deman equation of the first marmarked Pi=10-20, This is known as inverse demand fantion. So the anathen from of demand equation of the first market is 9, = 5- Po 9,- '

- How we will compute the total pevenue of the and market in the same way MR2 = 18 -0.582) TRE=PQq = 18.-0.5582 = 89- 1 / 2 9281 Pa 92 = 89,- que How deviding both side by si we get Pq = 8 - qq. or +92 = 8-P market] or Qq = 32-482 + , the û equation funtion is the demand equation of and market, int- [where P2 is the price of and SHOW price MP: MR1 Revenue curve summation of a MR is aggregate manginal which is the horizontal MR, and mR, Cupre... pe sh