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, assume 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 1 unit 0 unit 0.5 units 1.5 units 4.7 ptsA monopolist faces the demand curve illustrated below.121012 13 14 15 15 17 13 19 20 21 22 23 24Suppose the monopolist faces a marginal cost of $5, and that there are no fixed costs. Thus, the marginal cost is equal to theaverage 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, assume thateveryone who were willing to purchase the product at the uniform-price monopolist price are young people, and everyone whodid not purchase the product at that price are old people. How many units will the monopolist want to sell to old people inorder to maximize its profit?3 units1 unitO units0.5 units1.5 unitsO10987 654321017

A monopoly can be defined as a market structure consisting of many buyers and a single producer. The…

Answered: A monopolist faces the demand curve…

Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)

14th Edition

ISBN:9781305506381

Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Publisher:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Chapter16: Government Regulation

Section: Chapter Questions

Problem 10E

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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, assume 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

1 unit

0 unit

0.5 units

1.5 units

4.7 pts
A monopolist faces the demand curve illustrated below.
12
10
12 13 14 15 15 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, assume 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
1 unit
O units
0.5 units
1.5 units
O10987 654321017

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