Question: A monopolistic firm operates in two markets, with cost function TC=8Q+100 , market demand curves Q 1 =10-0.5P 1 , Q 2 =40-P 2 i)

A monopolistic firm operates in two markets, with cost function TC=8Q+100 , market demand curves

Q1=10-0.5P1, Q2=40-P2

i) If the firm practice price discrimination, find the prices and quantities in each market and maximum profit for the firm.

ii) Show that the firm will charge a higher price for the market with lower demand elasticity.

iii) If firm charges a unique price for both markets, find the quantity, price and maximum profit.

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