Question: A monopoly sells Frisbees to two customer groups. Group A has a downward-sloping straight-line demand curve, whereas the demand curve for Group B is infinitely
A monopoly sells Frisbees to two customer groups. Group A has a downward-sloping straight-line demand curve, whereas the demand curve for Group B is infinitely elastic. Draw the graph determining the profit-maximizing discriminatory prices and sales to the two groups. What will be the price of Frisbees to Group B? Why? How is the price to Group A determined?
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Group B has an infinitely elastic demand curve hence P MR Since the firm maximize... View full answer
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