Find the profit- maximizing price and quantity in each market

Find the profit- maximizing price and quantity in each market

A monopolist
sells in two geographically divided markets, the East and the West. Marginal
cost is

constant at $50 in
both markets.

Demand and marginal
revenue in each market are as follows:

Qe = 1200 – 2Pe

MRe = 600 – Qe

Qw = 800 – Pw

MRw = 800 – 2Qw

Where e represents
the east, and w represents the west market.

a. Find the profit-
maximizing price and quantity in each market.

b. In which market
is demand more elastic? How can you tell? Describe.

c. Under what
conditions, price discrimination is effective and why?


Price: £ 45

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