A monopolist faces the demand curve illustrated below. 11 10 9. 8. 4. 3. 115 16 17 13 19 20 21 22 23 24 Suppose the monopolist faces a marginal cost of $5, and that there are no fixed costs. Thus, the marginal cost is equal to the average total cost in this case. Now, suppose that the monopolist can price discriminate, but they are unable to do so perfectly. They can only separate the market into two submarkets by charging young and old people different prices. Also, assurme that everyone who were willing to purchase the product at the uniform-price monopolist price are young people, and everyone who did not purchase the product at that price are old people. How many units will the monopolist want to sell to old people in order to maximize its profit? 3 units 7 unit Dunits 0.5 units 1,5 units
Suppose the monopolist faces a marginal cost of $5, and that there are no fixed costs. Thus, the marginal cost is equal to the
3 units
1 unit
0 unit
0.5 units
1.5 units
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