6. Consider a monopolist that produces for two periods. The demand curves in both periods are:...

 

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6. Consider a monopolist that produces for two periods. The demand curves in both periods are: y(P) = 1-Pi yz(P2) = 1-pz The total cost functions are given by C(y) = 0.5y, in the first period, and C(y2, y) = (0.5-0.5y1)y in the second period. (Hence, there is learning by doing since acz(y2y1)/ay1=-0.5y2 <0.) There is a discount factor of 8 = 0.5 between the periods. Find the profit-maximizing quantities that the monopolist chooses in the two periods. 6. Consider a monopolist that produces for two periods. The demand curves in both periods are: y(P) = 1-Pi yz(P2) = 1-pz The total cost functions are given by C(y) = 0.5y, in the first period, and C(y2, y) = (0.5-0.5y1)y in the second period. (Hence, there is learning by doing since acz(y2y1)/ay1=-0.5y2 <0.) There is a discount factor of 8 = 0.5 between the periods. Find the profit-maximizing quantities that the monopolist chooses in the two periods.