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a. A price-discriminating monopolist serves two markets: young professionals and university students. The demand curve of the young professionals for this product is q1 = 100 + 40p1 - p12 and the demand curve for the university students is q2 = 110 + 23p2 - p22. The price elasticity of demand on the first market is -1.5, while that of the second market is -2.

What are the prices that the monopolist charges the two market segments?

Do these prices reflect their price sensitivity?

What is the total revenue to the monopolist from both markets?

b. A firm produces two types of fertilizers in the amounts of x and y kilograms respectively. Its variable costs are given by the function VC(x, y) = 4x2 + 3xy + 2y2. The Firm also incurs some fixed costs in the amount of $750. The production capacity for both fertilizers together is 30 kilograms. How many kilograms of both fertilizers will minimize cost?

Microeconomics, Economics

  • Category:- Microeconomics
  • Reference No.:- M93118585

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