A monopolist sells in two geographically divided markets, the East and the West. Marginal cost is constant
Question:
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 = 900 - 2PE
MRE = 450 - QE
Qw = 700 - Pw
MRW = 700 - 2Qw
a. Find the profit-maximizing price and quantity in each market.
b. In which market is demand more elastic?
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a Q E 900 2P E or P E 450 05Q E MR E 450 Q E MC AC 50 MR ...View the full answer
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