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3. Suppose that a monopolist sells in two markets with demand curves: la = 100 – 10PA OB = 8 – 2PB Show that for any given qu

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Answer #1

aСОe = -26 ( 9А = lор - 10 % ma = 100 =tob— ху! go-k-2 PB Elasticity 7.80 1. АР We are at x unit. Ou market B, we are at a don

b

MC=0 QA = 100-10PA TOPA = 100 - BA A B = 8-216 al B = 8-QB PA = 10-DA 10 PB- 4 - QB RA PACSA = (10-04) QA 10 RB = PB CB= (4-Qc

To MC - - At AB 2) Markets, Mastet A, 84 - 100 -10 PA PA-10-QA lo MRA= 10-DA BB=8-2PB. PB = 4 - AB MRB - 4-OB At equilibriumd

to Market B i charged loween pauce because R = P Q MR= P + ou de P [1 + o do] At equilibrim, MR=MC MC = P[it & MC It There arAdding 1 to both side. L+ 1 4 + 1 eB from 4 [It Yea ea Pe 1 PB Po Z PA

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