A firm serving a market operates with total variable cost TVC = Q2. The corresponding marginal cost
Question:
a) Suppose the firm sets the uniform price that maximizes profit. What would that price be?
b) Suppose the firm were able to act as a perfect first degree price-discriminating monopolist. How much would the firm's profit increase compared with the uniform profit-maximizing price you found in (a)?
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a The firm would maximize profit by producing until MR MC or 40 6 Q 2 Q Thus Q 5 ...View the full answer
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Prafull Geed
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