1) A monopolist faces two consumer groups: old and young. The inverse demand of old clients for the output of the monopolist is P=180-5Q. The inverse demand of young clients for the output of the monopolist is P=50-5Q. The cost of supplying any type of client is C(Q)=1000. If the monopolist can price discriminate between the two groups (i.e., charge a different uniform price to each group),

a) what price will old clients be charged?

b) what price will young clients be charged?

c) what will be the firm's profit?

Answer rating: 100% (QA)

To find the prices the monopolist will charge each group and the total profit we need to consider th... View the full answer