A discriminating monopolist ought to know the demand function facing him in each market in order...

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A discriminating monopolist ought to know the demand function facing him in each market in order to make good profits. a) With use of diagrams show how differences in the elasticity of demand will lead to different 4 Marks revenue generation. b) Monopoly arises due to existence of barriers to entry. With suitable examples of each, explain clearly distinguishing between technical and legal barriers to entry. 6 Marks c) The total cost function of a monopolist is given as follows TC-Q3-5Q2+4Q+150 i) Compute the average fixed cost function. 1 Marks ii) At what level is the average cost optimised? iii) Using Calculus show whether the point above is a minimum or maximum 2 Marks 2 Marks A discriminating monopolist ought to know the demand function facing him in each market in order to make good profits. a) With use of diagrams show how differences in the elasticity of demand will lead to different 4 Marks revenue generation. b) Monopoly arises due to existence of barriers to entry. With suitable examples of each, explain clearly distinguishing between technical and legal barriers to entry. 6 Marks c) The total cost function of a monopolist is given as follows TC-Q3-5Q2+4Q+150 i) Compute the average fixed cost function. 1 Marks ii) At what level is the average cost optimised? iii) Using Calculus show whether the point above is a minimum or maximum 2 Marks 2 Marks

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a Differences in the elasticity of demand will lead to different revenue generation for a monopolist The elasticity of demand measures the responsiveness of quantity demanded to changes in price Here ... View the full answer