ENGR.ECONOMIC ANALYSIS
ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN: 9780190931919
Author: NEWNAN
Publisher: Oxford University Press
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Economics
Suppose that a monopolist supplies a product in
two distinct markets, LA and NÝC. The demand
functions for the
two markets are PLA = 27 – 3QLA and PNYC = 42
- 6QNYC. The monopolist has a fixed cost of $12
and a constant
marginal cost of $5 per unit.
a. If segmenting is feasible, what are the profit-
maximizing prices, quantities, and maximized
profit?
b. If segmenting is NOT feasible, what is the profit-
maximizing price, quantity, and maximized profit?
c. How much is the difference in total consumer
surplus in the two cases? Which case makes
consumers better off?
-
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Transcribed Image Text:Economics Suppose that a monopolist supplies a product in two distinct markets, LA and NÝC. The demand functions for the two markets are PLA = 27 – 3QLA and PNYC = 42 - 6QNYC. The monopolist has a fixed cost of $12 and a constant marginal cost of $5 per unit. a. If segmenting is feasible, what are the profit- maximizing prices, quantities, and maximized profit? b. If segmenting is NOT feasible, what is the profit- maximizing price, quantity, and maximized profit? c. How much is the difference in total consumer surplus in the two cases? Which case makes consumers better off? -
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