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A monopolist sells in two states. The demand function in state 1 and 2 respectively is Q1(p1)=50 – p1 and Q2(p2)=90-1.5p2. The monopolist produces at a constant marginal cost of 10. If the monopolist is
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A monopolist sells in two states. The demand function in state 1 and 2 respectively is Q1(p1)=50 – p1 and Q2(p2)=90-1.5p2. The monopolist produces at a constant marginal cost of 10. If the monopolist is able to price discriminate and charge different prices in the two markets, she would choose to charge p1*=X and p2*= Y.

values for X and Y?

User Kalpesh Khandla
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Answer

The answer and procedures of the exercise are attached in the following archives.

Explanation

You will find the procedures, formulas or necessary explanations in the archive attached below. If you have any question ask and I will aclare your doubts kindly.

A monopolist sells in two states. The demand function in state 1 and 2 respectively-example-1
A monopolist sells in two states. The demand function in state 1 and 2 respectively-example-2
A monopolist sells in two states. The demand function in state 1 and 2 respectively-example-3
User Reshma Kr
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