(3rd Degree Price Discrimination) A Monopolist selling a cell phone in two separate markets. They must...
(3rd Degree Price Discrimination)
A Monopolist selling a cell phone in two separate markets. They must decide how much to sell in each market in order to maximize their total profits.
The demand in the Brazilian Market is : QBrazil = 120 – 10PBrazil
The demand in the United States Market is: QUSA = 60 – 20PUSA
If Total Cost is: TC = 90 + 2(QUSA +QBrazil)
- Calculate the Price and Quantity if the Monopolist Maximized their profit and sells in both markets?
- Calculate the Profit if he Monopolist Maximized their profit and sells in both markets?
- In the absence of 3rd Degree Price Discrimination and the firm must sell at the same price in both markets, what is the price, quantity and total profit?
Homework Answers
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(3rd Degree Price Discrimination)
A Monopolist selling a cell phone in two separate markets. They
must...
A Monopolist selling a cell phone in two separate markets. They must decide how much to...
A Monopolist selling a cell phone in two separate markets. They must decide how much to sell in each market in order to maximize their total profits. The demand in the Brazilian Market is : QBrazil = 120 – 10PBrazil The demand in the United States Market is: QUSA = 60 – 20PUSA If Total Cost is: TC = 90 + 2(QUSA +QBrazil) Calculate the Price and Quantity if the Monopolist Maximized their profit and sells in both markets? (8 Points) Calculate...
3. A monopolist is able to practice third-degree price discrimination between two markets. The demand function...
3. A monopolist is able to practice third-degree price discrimination between two markets. The demand function in the first market is q = 500 - 2p and the demand function in the second market is q = 1,500 - 6p. To maximize his profits assuming constant marginal cost, he should a. charge a higher price in the second market than in the first. b. charge a higher price in the first market than in the second. c. charge the same...
Question 2 (35 points): (3rd Degree Price Discrimination) Let there be a monopolist firm and two ...
Please answer clearly and explain.
Question 2 (35 points): (3rd Degree Price Discrimination) Let there be a monopolist firm and two groups of consumers. Suppose that marginal cost is defined by MC- 2. T'he demand that each consumer receives is given by Q,-50-pl 202 200-P 1) ( 4 points) Consider the monopolist engages in first degree price discrimina- tion only in market 2. Compute the monopoly profit in this market. ii) (4 points) Which group has a mhore inelastic demand...
Question 2 (35 points): (3rd Degree Price Discrimination) Let there be a monopolist firm and two ...
Please answer clearly and explain. Thank you!
Question 2 (35 points): (3rd Degree Price Discrimination) Let there be a monopolist firm and two groups of consumers. Suppose that marginal cost is defined by MC- 2. The demand that each consumer receives is given by 1 50- P 2Q2- 200 - P2 i) (4 points) Consider the monopolist engages in first degree price discrimina- tion only in market 2. Compute the monopoly profit in this market. ii) (4 points) Which group...
please help solve. Is this also 3rd degree price discrimination? A price-discriminating monopolist faces the following...
please help solve. Is this also
3rd degree price discrimination?
A price-discriminating monopolist faces the following inverse demand functions: In Market One it is P1- 80-Q1 and in Market Two it is P2 60-Q2 Marginal cost is constant at $10. Consumers in market two can resell the good to consumers in market one at a cost of $4 per unit. Find the profit-maximizing quantity and price charged in each market subject to the resale constraint.
QUESTION 5: THIRD DEGREE PRICE DISCRIMINATION (20pt) A monopolist engages in third degree price discrimination.There are...
QUESTION 5: THIRD DEGREE PRICE DISCRIMINATION (20pt) A monopolist engages in third degree price discrimination.There are 2 types of consumers, and the monopolist wants to sell to both groups. The monopolist is allowed to charge different prices and hence engages in third degree price discrimination. The demand curve for each group (the entire group) is as follows 01 500 10P Q2 200-5P2 The total cost function is TC 2000+10Q (a) What price does this firm charge to each group? (b)...
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...
Consider a monopolist who price discriminates using third-degree (direct) price discrimination across two markets, A and...
Consider a monopolist who price discriminates using third-degree (direct) price discrimination across two markets, A and B. If the elasticity of demand is -1.5 in market A and -2.3 in market B, then A. the optimal price in market A should be lower than the optimal price in market B. B. the optimal price in market A should be higher than the optimal price in market B. C. the optimal price should be the same in market A and in...
Problem 1. Second Degree price discrimination Suppose all consumers are identical and market demand given by...
Problem 1. Second Degree price discrimination Suppose all consumers are identical and market demand given by p = 100-q. The monopoly's cost function is C(q) q2. (a) Suppose the monopolist cannot discriminate prices and must set a uniform price. Compute price and quantity set by the monopolist. Compute the profit of the monopoly. b) Suppose now that the monopoly can set a two-part tariff. Find the optimal two-part tariff. Compute the profit of the monopolist Problem 2. Third Degree price...
A monopolist practices third degree price discrimination by separating its customers into two groups: consumers under...
A monopolist practices third degree price discrimination by separating its customers into two groups: consumers under 65 and senior citizens. The monopolist's marginal oost is MC = 0.05q, where q is the total output in both markets. The marginal cost does not depend on the market in which the goods are sold. The demand curves are Adults: PA-25-1/6 x QA-25-0.1667 x QA Seniors: PS = 15-⅛xQs-15-0.125 x Qs ● . A. What is the total industry demand curve? (Rewrite each...
Please answer clearly and explain.
Question 2 (35 points): (3rd Degree Price Discrimination) Let there be a monopolist firm and two groups of consumers. Suppose that marginal cost is defined by MC- 2. T'he demand that each consumer receives is given by Q,-50-pl 202 200-P 1) ( 4 points) Consider the monopolist engages in first degree price discrimina- tion only in market 2. Compute the monopoly profit in this market. ii) (4 points) Which group has a mhore inelastic demand...
Please answer clearly and explain. Thank you!
Question 2 (35 points): (3rd Degree Price Discrimination) Let there be a monopolist firm and two groups of consumers. Suppose that marginal cost is defined by MC- 2. The demand that each consumer receives is given by 1 50- P 2Q2- 200 - P2 i) (4 points) Consider the monopolist engages in first degree price discrimina- tion only in market 2. Compute the monopoly profit in this market. ii) (4 points) Which group...
please help solve. Is this also
3rd degree price discrimination?
A price-discriminating monopolist faces the following inverse demand functions: In Market One it is P1- 80-Q1 and in Market Two it is P2 60-Q2 Marginal cost is constant at $10. Consumers in market two can resell the good to consumers in market one at a cost of $4 per unit. Find the profit-maximizing quantity and price charged in each market subject to the resale constraint.
QUESTION 5: THIRD DEGREE PRICE DISCRIMINATION (20pt) A monopolist engages in third degree price discrimination.There are 2 types of consumers, and the monopolist wants to sell to both groups. The monopolist is allowed to charge different prices and hence engages in third degree price discrimination. The demand curve for each group (the entire group) is as follows 01 500 10P Q2 200-5P2 The total cost function is TC 2000+10Q (a) What price does this firm charge to each group? (b)...
Consider a monopolist who price discriminates using third-degree (direct) price discrimination across two markets, A and B. If the elasticity of demand is -1.5 in market A and -2.3 in market B, then A. the optimal price in market A should be lower than the optimal price in market B. B. the optimal price in market A should be higher than the optimal price in market B. C. the optimal price should be the same in market A and in...
Problem 1. Second Degree price discrimination Suppose all consumers are identical and market demand given by p = 100-q. The monopoly's cost function is C(q) q2. (a) Suppose the monopolist cannot discriminate prices and must set a uniform price. Compute price and quantity set by the monopolist. Compute the profit of the monopoly. b) Suppose now that the monopoly can set a two-part tariff. Find the optimal two-part tariff. Compute the profit of the monopolist Problem 2. Third Degree price...
A monopolist practices third degree price discrimination by separating its customers into two groups: consumers under 65 and senior citizens. The monopolist's marginal oost is MC = 0.05q, where q is the total output in both markets. The marginal cost does not depend on the market in which the goods are sold. The demand curves are Adults: PA-25-1/6 x QA-25-0.1667 x QA Seniors: PS = 15-⅛xQs-15-0.125 x Qs ● . A. What is the total industry demand curve? (Rewrite each...
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