A monopolist produces a single homogeneous good, which she sells in two distinct markets between which price discrimination is possible. Her total cost function is:
TC = 1/3 Q3 - 7.5Q2 + 370Q + 100
The demand curves in the two markets are given by:
q1 = 80 - 0.2p1 and q2= Ap2-5
The monopolist achieves a profit-maximizing equilibrium at which her total output (Q = q1 + q2) is 10 and she charges a price of $360 in market 1.
a) What is the profit-maximizing output in markets 1 and 2?
b) find out marginal revenue in either market.
c) What is the cost of producing an extra unit at the profit maximizing output?
d) What price is charged in market 2?