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A monopolist sells its product in two separate markets, A&B. The demand functions for the two markets are: P(A) = 30,000 - 0.4Q(A) P(B) = 20,000 - 0.2Q(B) The total cost function for the firm is: TC = 10,000,000 + 12,000 [Q(A) + Q(B)] a) Should the firm charge a different price in each market in order to maximize its profits? If yes, what are these prices? b) How much output is sold at these prices and what is the profit in each market? c) Based on your answer in part a, justify why would the firm charge same or different prices.

Microeconomics, Economics

  • Category:- Microeconomics
  • Reference No.:- M9744624

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