A monopoly sells its good in the U.S. and Japanese markets. The American inverse demand function is
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Question:
A monopoly sells its good in the U.S. and Japanese markets. The American inverse demand function is
Pa = 110- Qa
and the Japanese inverse demand function is Pj = 90-2Qj,
where both prices, Pa and p₁, are measured in dollars. The firm's marginal cost of production is m = $25 in both countries. If the firm can prevent resales, what price will it charge in both markets? (Hint: The monopoly determines its optimal (monopoly) price in each country separately because customers cannot resell the good.)
The equilibrium price in Japan is $ (round your answer to the nearest penny)
Related Book For
Managerial Economics and Strategy
ISBN: 978-0321566447
1st edition
Authors: Jeffrey M. Perloff, James A. Brander
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