Hello! I just want to ask for help whether the answers in the given pictures are correct. If it's not, please help me recheck and resolve it. Please refer to the given pictures below for the answers. After verifying the given answers shown in the subsequent picture, PLEASE ANSWER LETTER D. SITUATION/PROBLEM:Consider a price discriminating monopolist facing two markets for its good. The demand equations faced by the monopolist and its cost function are: Market 1: Q1 = 55 - P1Market 2: Q2 = 70 - 2P2Cost Function: TC(Q) = 100 + 5Q, where Q = Q1 + Q2. a. If the monopolist can maintain the separation between the two markets, calculate the optimal output level that the firm should produce for each market to maximize profits. b. Determine the prices the monopoly should charge in each market, and calculate the profit of the monopoly. c. Construct a graph to represent your findings in item # 3.a and #3.b. d. If the monopolist cannot maintain the separation between the two markets, calculate the optimal output level and determine the price will this be sold? NOTE: Type only your answers. Please do not handwritten your answers. Step 3*AProfit maximization condition:MR=MCFor market 1MC=MR15=55-2Q2Q1=50Ql=25For market 2MC=MR25=35-Q2Q2=30So the optimal level of output level that the firm should produce for market lis 25 and for market 2 is 30.Step 4ВPutting Q1=25 in equation 4P1=55-25=30Putting Q2=30 in equation 6P2=35-0.5×30P2=20Monopoly should charge $30 for each unit of the good in market 1 and 20 for each unit of the good in market 2.Monopolist profit:Profit=R1+R2-TCProfit=25x30+30×20-(100+5(25+30))Profit=975Step 5*C50PriceQ1=55-P1MR140P1 3GP2 20-Q2=70-2P210-(30, 5)MC=5(25, 5)10203040506070Q1Q2Quantity *Answer:GivenMarket demand:Market 1: Q1 = 55 – P1%3D(1)Market 2: Q2 = 70 – 2P2(2)-Cost function of the monopolist: TC(Q)=100+5Q(3)Where Q=Q1+Q2Since you have posted multiple subparts question, as per the answering guideline, we will solve the first three subparts. ThanksStep 2MC=DTCDQ=5The marginal cost of the firm is constant and equal to 5.Inverse demand function in market 1:P1=55-Q1(4)Revenue function of market 1:R1=P1Q1R1=55Q1-Q1?And marginal revenue in market 1:MR1=55-2Q1(5)Similarly:Inverse demand function in market 2:P2=35-0.5Q2Revenue function of market 2:R2=P2Q2R2=35Q2-0.5Q2²And marginal revenue in market 1:MR2=35-Q2(7)

A firm that can offer distinct units of a good or service for varying prices is known as a…

Answered: f the monopolist cannot maintain the…

Managerial Economics: A Problem Solving Approach

5th Edition

ISBN:9781337106665

Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor

Publisher:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor

Chapter17: Making Decisions With Uncertainty

Section: Chapter Questions

Problem 6MC

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Hello! I just want to ask for help whether the answers in the given pictures are correct. If it's not, please help me recheck and resolve it. Please refer to the given pictures below for the answers.

After verifying the given answers shown in the subsequent picture, PLEASE ANSWER LETTER D.

SITUATION/PROBLEM:

Consider a price discriminating monopolist facing two markets for its good. The demand equations faced by the monopolist and its cost function are:

Market 1: Q₁ = 55 - P₁

Market 2: Q₂ = 70 - 2P₂

Cost Function: TC(Q) = 100 + 5Q, where Q = Q₁ + Q_2.

a. If the monopolist can maintain the separation between the two markets, calculate the optimal output level that the firm should produce for each market to maximize profits.

b. Determine the prices the monopoly should charge in each market, and calculate the profit of the monopoly.

c. Construct a graph to represent your findings in item # 3.a and #3.b.

d. If the monopolist cannot maintain the separation between the two markets, calculate the optimal output level and determine the price will this be sold?

NOTE: Type only your answers. Please do not handwritten your answers.

Step 3
*A
Profit maximization condition:
MR=MC
For market 1
MC=MR15=55-2Q
2Q1=50
Ql=25
For market 2
MC=MR2
5=35-Q2
Q2=30
So the optimal level of output level that the firm should produce for market lis 25 and for market 2 is 30.
Step 4
В
Putting Q1=25 in equation 4
P1=55-25=30
Putting Q2=30 in equation 6
P2=35-0.5×30P2=20
Monopoly should charge $30 for each unit of the good in market 1 and 20 for each unit of the good in market 2.
Monopolist profit:
Profit=R1+R2-TC
Profit=25x30+30×20-(100+5(25+30))
Profit=975
Step 5
*C
50
Price
Q1=55-P1
MR1
40
P1 3G
P2 20-
Q2=70-2P2
10-
(30, 5)
MC=5
(25, 5)
10
20
30
40
50
60
70
Q1
Q2
Quantity

*Answer:
Given
Market demand:
Market 1: Q1 = 55 – P1
%3D
(1)
Market 2: Q2 = 70 – 2P2
(2)
-
Cost function of the monopolist: TC(Q)=100+5Q
(3)
Where Q=Q1+Q2
Since you have posted multiple subparts question, as per the answering guideline, we will solve the first three subparts. Thanks
Step 2
MC=DTCDQ=5
The marginal cost of the firm is constant and equal to 5.
Inverse demand function in market 1:
P1=55-Q1
(4)
Revenue function of market 1:
R1=P1Q1
R1=55Q1-Q1?
And marginal revenue in market 1:
MR1=55-2Q1
(5)
Similarly:
Inverse demand function in market 2:
P2=35-0.5Q2
Revenue function of market 2:
R2=P2Q2
R2=35Q2-0.5Q2²
And marginal revenue in market 1:
MR2=35-Q2
(7)

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