Question 1
Consider a monopolist with total costs of TC = Q2 + 4Q + 36 and marginal costs of MC = 2Q + 4. They face two demands of P1 = 100 - Q1 and P2 = 400 - Q2. Round answers to one decimal place.
1) What is the monopoly equilibrium price and quantity for market 1?
2) What is the monopoly equilibrium price and quantity for market 2?
3) What is the monopolist's profit from setting separate market prices?
4) How much of an arbitrage opportunity is available with separate pricing?
5) What is the equation for inverted aggregate demand for when both markets open?
6) What is the uniform equilibrium market price and quantity?
7) What is the monopolist's profit from setting a uniform price?
8) The monopolist is more profitable with uniform separate pricing.
Score = 0