This paper circulates around the core theme of You are the manager of a monopoly that sells a product to two groups of consumers in different parts of the country. Group 1’s elasticity of demand is -3, while group 2’s is -4. Your marginal cost of producing the product is $20.Determine your optimal together with its essential aspects. It has been reviewed and purchased by the majority of students thus, this paper is rated 4.8 out of 5 points by the students. In addition to this, the price of this paper commences from £ 99. To get this paper written from the scratch, order this assignment now. 100% confidential, 100% plagiarism-free.
You are the manager of a monopoly that sells a product to
two groups of consumers in different parts of the country. Group 1’s elasticity
of demand is -3, while group 2’s is -4. Your marginal cost of producing the
product is $20.
a. Determine your optimal markups and prices under third-degree price
discrimination.
Instruction: Round your answers to two decimal places.
Markup for group 1:
Price for group 1: $
Markup for group 2:
Price for group 2: $
b. Which of the following are necessary conditions for third-degree price
discrimination to enhance profits.
Instructions:
You may select more than one answer. Click the box with a check mark for the
correct answers and click twice to empty the box for the wrong answers. You
must click to select or deselect each option in order to receive full credit.
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At least one group has elasticity
of demand less than one in absolute value.
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There are two different groups
with different (and identifiable) elasticities of demand.
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We are able to prevent resale
between the groups.
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At least one group has elasticity
of demand greater than 1 in absolute value.
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