Suppose a price-discriminating monopoly has segregated its market into two submarkets and can prevent resale between the two. Assume that its marginal cost is constant and equal to its average total cost of $8. The firm’s demand schedule for the first group is given by the first two columns of the following table.
a. Find the firm’s total revenue schedule for this submarket, entering the data into the table where indicated. Use these data to determine the marginal revenue schedule in this submarket. Don't use plagiarized sources. Get Your Custom Essay on
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b. What output level and price will maximize the firm’s profit in this submarket? c. The firm’s demand schedule for the second group is given by the first two columns of the following table.
d. Find the firm’s total and marginal revenue schedules in this second submarket. What output level and price will maximize the firm’s profit in this submarket? e. Based on these prices, which submarket has the more elastic demand? f. What is this firm’s total economic profit? |
