Suppose a monopolist has a total cost function of TC=100Q+1000, where Q is the total number of units he produces.

Published by admin at October 25, 2023

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Suppose a monopolist has a total cost function of TC=100Q+1000, where Q is the total number of units he produces. He is able to separate his market into two distinct segments with no possibility of arbitrage, where in market one P1=500-10Q1 and in market two P2=300-20Q2. This implies that Q=(Q1+Q2).
What price and quantity does the monopolist sell in each market if he is practising third degree price discrimination?
What is his total profit from the two markets under the above pricing technique?
Calculate price, quantity, and profit if he were unable to separate the two markets.
What if he was able to identify the marginal benefit to every single customer and charged them
their maximum willingness to pay for each quantity purchased? What if he was using two-tier
pricing?
Draw the demand curves for the separate markets 1 and 2 and for the joint market。