Question

12. In a certain country, only two cities, A and B, exist, and only dates are consumed. The demand for dates in city A is qu = 200 -p, while the demand for dates in city B is 9B = 300 - p. Dates in this country are supplied by a monopolist, who faces the total cost of production of dates of TC(q) = 9. a. If the monopolist treats cities A and B as separate markets and can pursue price discrimination (no arbitrage options), what is the price and the quantity of dates supplied in each market? b. If consumers in both cities have the opportunity of purchasing dates for 100 pesos per unit from another producer, how does the behavior of the monopolist change? c. If the monopolist cannot pursue price discrimination and has to treat the entire country as a single market, what is the equilibrium price and quantity in that market? Present the problem and the solution graphically.

Answer 1

А = 2оо - Р OB = 300 P R=q 24 мо oly discriminate prices then MRA = 200-20A MRG-300-208 мен еме 200-20AFI 20020B - 1 A - 99.5 OB=299 149.5 6 PA=1015 of the too, it will not change PB = 150.5 the monopoly contome ble that difference is to the too of competition to sul market demand o = A + OB OT = 300 -P+200-P =500-2p co-soo-2P P=250 -0.50 MR = 2500 Mc=1 Polit is mad when Mrame 950-0=1 10=249) 4 Price = 251 = 125.5 aus 4 OB = 174.5