Question: 9. Consider a monopolist that serves two geographically separated markets. Demand in the two markets and the firm's costs are as follows. The firm sets

9. Consider a monopolist that serves two geographically separated markets. Demand in the two markets and the firm's costs are as follows. The firm sets prices to maximize profit. . Qf =40020P1; 05131520 . Q3 = sou30.02; 0 s P2 3 20; - C = 0-02(Ql + (22)2 Find the firm's profit, expressed as a function of two variables: P1 and P2. Find both first order partial derivatives of the profit function, and all four second order partial derivatives. What is the profit function's \"Hessian matrix\"? Is the profit function concave at all possible combinations of P1 and P2? Explain. What combination of prices maximizes profit for the firm? Suppose that the firm is legally required to charge the same price in both markets (P1=P2=P). What would its (univariate) profit function be in that case? g. What price would maximize profit in that case? Us\" 7"me

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer

Step: 1 Unlock blur-text-image

Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock

Step: 3 Unlock

Students Have Also Explored These Related Economics Questions!

Suppose you are trying to classify a variable where 96% of its observations equal 0 and only 4% equal 1. You run a logistic regression, and the classification table shows that 97% of the...

A monopolist serves two geographically separated markets. In market A, the demand curve is Q = 155 0.2P In market B, the demand curve is Q = Y 0.8P where Y is a constant. The monopolist can set...

Question 2(1 point) If a monopolist sets her output such that marginal revenue, marginal cost and average total cost are equal, economic profit must be: Question 2 options: Zero Negative Positive...

Question 1(1 point) The maximum price that a consumer is willing to pay for each unit bought is the ________ price. Question 1 options: reservation consumer surplus auction choke market Question 2(1...

Problem 1 [50 points] Suppose that BMW can produce any quantity of cars at a constant marginal cost equal to $20,000 and a fixed cost of $10 billion. You are asked to advise the CEO as to what prices...

Question One [10 marks] A firm produces cellular telephone service using equipment and labor. When it uses E machine-hours of equipment and hires L person-ours of labor, it can provide up to Q unites...

This problem has you consider how to maximize profits when you have one manufacturing facility (say in Ohio) that serves two markets (say in Michigan and Arizona). Thus, rather than just find the q...

Attached is the screen shot. Question Five [10 marks] Consider an island with exclusive fishing rights to their own waters. The fishing industry is unregulated and the production function,...

"Purple Dream" has the monopoly on the production of purple light-emitting diodes (LEDs). It faces geographically separated markets, market 1 and 2. The demands are q A = 1 - p A and q B = 1/2 - p B...

Task02. 1.) What is the main difference between a competitive firm and a monopoly? a. A competitive firm owns a key resource, but a monopoly firm does not. b. A competitive firm is a price taker, and...

Employee: Sabana McGuire, 476 Rountree Lane, Courtice, ON, L1L 2N5 Date of Birth June 17, 1987, SIN 587654321, Employee number 456 Hired April 10, 2009 Being terminated November 15, 2013 Returned...

Write Python code for this problem The Python random module has functions that can be used to generate random numbers For example the randint function can be used to generate random integers within a...

You work for a firm of management consultants that offers assistance to new businesses. One of your clients is Windsor Manufacturing, a company that manufactures a small, but vital, component for the...

Give an example of a responsibility center that is properly treated as a revenue center.

Identify three responsibility centers in a fast-food restaurant and explain how they may interact.

Suppose you are the manager of a fitness center that is one of many in a chain. Give one example of a cost that you control and one example of a cost you do not control. Why is it important in this...

For the beam and loading shown, (a) Draw the shear and bending-moment diagrams, (b) Determine the maximum absolute values of the shear and bending moment. 8 kips 4 kips 10 kips DY -45 t-06R 1.8 ft'...

For the beam and loading shown, (a) Draw the shear and bending-moment diagrams, (b) Determine the maximum absolute values of the shear and bending moment. 3 kips 5 kips 4 kips CV E B D 2.4 ft- -3 ft-...

Identifying How Machine Learning Can Solve Problems What problem would you like your machine learning model to solve? What output would you like your machine learning model to produce? How will you...

6. What is meant by: accessibility carries greater weight than relevance?

1. To learn how to develop a vision that can be communicated. To gain insight into the importance of game theory for communication strategies.

9. Take a view or attitude that you hold strongly. Search for information that is opposed to this view or attitude. Discuss.