Suppose you are employed at a monopolistic company as a research (pricing) economist and you arederiving the behavior of two markets based on demand curves given by:Di(P1) 3 50 — PіD:(p>) — 50 — 2р2Assume that the marginal cost is constant at $8 a unit.(a) If it can price discriminate, what price should it charge in each market in order to maximizeprofits?(b) If it can't price discriminate, what price should it charge?

The demand for the first market is given as follows: The demand for the second market is given as…

Suppose you are employed at a monopolistic company as a research (pricing) economist and you are deriving the behavior of two markets based on demand curves given by: D1(P1) = 50 – Pi D2(P2) = 50 - 2p2 Assume that the marginal cost is constant at $8 a unit. (a) If it can price discriminate, what price should it charge in each market in order to maximize profits? (b) If it can't price discriminate, what price should it charge?

Suppose you are employed at a monopolistic company as a research (pricing) economist and you are deriving the behavior of two markets based on demand curves given by: D1(P1) = 50 – Pi D2(P2) = 50 - 2p2 Assume that the marginal cost is constant at $8 a unit. (a) If it can price discriminate, what price should it charge in each market in order to maximize profits? (b) If it can't price discriminate, what price should it charge?

Microeconomic Theory

12th Edition

ISBN:9781337517942

Author:NICHOLSON

Publisher:NICHOLSON

Chapter18: Asymmetric Information

Section: Chapter Questions

Problem 18.3P

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