Consider a firm that is a monopolist and sells in two distinct markets. The demand curves...
Consider a firm that is a monopolist and sells in two distinct
markets. The demand curves in the two markets are:
P1 = 160 -8Q1
P2 = 80-2Q2
The marginal cost curves is
5+ Q where Q is the firms entire output destined for either
market.
What pricing policy would you suggest?
How many units of output should it sell in each market?
Homework Answers
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Consider a firm that is a monopolist and sells in two distinct
markets. The demand curves...
Question 5 Consider a firm that is a monopolist and sells in two distinct markets. The...
Question 5 Consider a firm that is a monopolist and sells in two distinct markets. The demand curves in the two markets are: P1 = 160 -8Q1 P2 = 80-2Q2 The marginal cost curves is 5+ Q where Q is the firms entire output destined for either market. What pricing policy would you suggest? How many units of output should it sell in each market?
2. This question is adapted from our textbook. A monopolist has two segmented markets with demand...
2. This question is adapted from our textbook. A monopolist has two segmented markets with demand curves given by P1 = 160 – 91 P2 = 130 – 592 where pı and p2 are the prices charged in each market segment, and qı and q2 are the quantities sold. Its cost function is given by c(q) = 2q2, where q = (1 + 02. Find the monopolist's profit maximising prices p*, pand outputs q*, q* sold in each market.
A monopolist sells in two markets. The demand curve for her product is given by p1...
A monopolist sells in two markets. The demand curve for her product is given by p1 = 120 y1 in the first market; and p2 = 105 y2 2 in the second market, where yi is the quantity sold in market i and pi is the price charged in market i. She has a constant marginal cost of production, c = 10, and no fixed costs. She can charge different prices in the two markets. 1) Suppose the monopolist charges...
A monopolist sells in two markets that have demand functions given by D1 (p1) = 100...
A monopolist sells in two markets that have demand functions given by D1 (p1) = 100 - p1 and D2 (p2) = 100 - (1/2) p2: The marginal cost of production is constant at c = 20. (a) Assume the firm charges different prices to each group. What will be the equilibrium quantities in markets 1 and 2? (b) What market pays a higher price? Why?
Question 6 (1 point) Consider a monopolist which sells output in two markets, the home market...
Question 6 (1 point) Consider a monopolist which sells output in two markets, the home market and the foreign market. The monopolist faces a linear demand curve of P1 - 20 - Q1 in the home market and P2 - 40-202 in the foreign market. The monopolists total cost is (Q=1500+q? What prices the monopolist charges in the home and the foreign market respectively? $11. $21. $12, S16 $6. $18 $18,528. none of the above Question 5 (1 point) A...
1) A monopolist firm sells its output in two regions: Califomia and Florida. The demand curves...
1) A monopolist firm sells its output in two regions: Califomia and Florida. The demand curves for each market are QF15-PF OF and Qc are measured in 1000s of units, so you may get decimal values for Q. If P-$10 and Q-1, the profit of S10 that you calculate is actually $10,000). Qc 12.5 - 2 Pc The monopoly's cost function is C 5+3Q5+3(QF+Qc) First, we'll assume that the monopoly can only charge one price in both markets. a) Calculate...
A monopolist is deciding how to allocate output between two geographically separated markets (East Coast and...
A monopolist is deciding how to allocate output between two
geographically separated markets (East Coast and Midwest). Demand
and marginal revenue for the two markets are:
What are price, output, profits, marginal revenues, and
deadweight loss if the monopolist can price discriminate? (round
all answers to two decimal places)
P1 20-Q1 MR1 20-2Q1 P2 25-2Q2 MR2 = 25 - 4Q2 The monopolist's total cost is C 5+5 (Q1+Q2) In market 1, the price is $ 12.5 and the quantity is...
3. Suppose that a monopolist sells in two markets with demand curves: la = 100 –...
3. Suppose that a monopolist sells in two markets with demand curves: la = 100 – 10PA OB = 8 – 2PB Show that for any given quantity, demand is more elastic in market A than in market B. 3 points Suppose that the monopolist produces at zero marginal cost. How much does he supply in each market, and what price does he charge? 3 points Suppose the monopolist's Marginal Cost curve is represented by: MC = 0/21 How much...
Consider two markets with demand curves: pi-a - byı and p2-e - fy2. The monopolist has...
Consider two markets with demand curves: pi-a - byı and p2-e - fy2. The monopolist has constant marginal cost of c. If third-degree price discrimination occurs, what is the level of total deadweight loss?
1. A monopolist with marginal cost of production of 40 sells to two distinct consumers. For...
1. A monopolist with marginal cost of production of 40 sells to two distinct consumers. For consumer 1, demand is given by Q1 = 300 - P1. For consumer 2, it is given by Q2 = 180 - P2. a. Determine the optimal uniform price and output when discrimination is impossible. b. Assume third-degree discrimination between the two consumers is possible. What price will be set for each consumer? What quantity will be sold for each consumer? c. How does...
2. This question is adapted from our textbook. A monopolist has two segmented markets with demand curves given by P1 = 160 – 91 P2 = 130 – 592 where pı and p2 are the prices charged in each market segment, and qı and q2 are the quantities sold. Its cost function is given by c(q) = 2q2, where q = (1 + 02. Find the monopolist's profit maximising prices p*, pand outputs q*, q* sold in each market.
Question 6 (1 point) Consider a monopolist which sells output in two markets, the home market and the foreign market. The monopolist faces a linear demand curve of P1 - 20 - Q1 in the home market and P2 - 40-202 in the foreign market. The monopolists total cost is (Q=1500+q? What prices the monopolist charges in the home and the foreign market respectively? $11. $21. $12, S16 $6. $18 $18,528. none of the above Question 5 (1 point) A...
1) A monopolist firm sells its output in two regions: Califomia and Florida. The demand curves for each market are QF15-PF OF and Qc are measured in 1000s of units, so you may get decimal values for Q. If P-$10 and Q-1, the profit of S10 that you calculate is actually $10,000). Qc 12.5 - 2 Pc The monopoly's cost function is C 5+3Q5+3(QF+Qc) First, we'll assume that the monopoly can only charge one price in both markets. a) Calculate...
A monopolist is deciding how to allocate output between two
geographically separated markets (East Coast and Midwest). Demand
and marginal revenue for the two markets are:
What are price, output, profits, marginal revenues, and
deadweight loss if the monopolist can price discriminate? (round
all answers to two decimal places)
P1 20-Q1 MR1 20-2Q1 P2 25-2Q2 MR2 = 25 - 4Q2 The monopolist's total cost is C 5+5 (Q1+Q2) In market 1, the price is $ 12.5 and the quantity is...
3. Suppose that a monopolist sells in two markets with demand curves: la = 100 – 10PA OB = 8 – 2PB Show that for any given quantity, demand is more elastic in market A than in market B. 3 points Suppose that the monopolist produces at zero marginal cost. How much does he supply in each market, and what price does he charge? 3 points Suppose the monopolist's Marginal Cost curve is represented by: MC = 0/21 How much...
Consider two markets with demand curves: pi-a - byı and p2-e - fy2. The monopolist has constant marginal cost of c. If third-degree price discrimination occurs, what is the level of total deadweight loss?
1. A monopolist with marginal cost of production of 40 sells to two distinct consumers. For consumer 1, demand is given by Q1 = 300 - P1. For consumer 2, it is given by Q2 = 180 - P2. a. Determine the optimal uniform price and output when discrimination is impossible. b. Assume third-degree discrimination between the two consumers is possible. What price will be set for each consumer? What quantity will be sold for each consumer? c. How does...
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