Question: A monopolistic firm operates in two markets, with cost function TC=Q 2 +10Qmarket demand curvesQ 1 =32-0.4P 1 , Q 2 =18-0.1P 2 a. If

A monopolistic firm operates in two markets, with cost function TC=Q2+10Qmarket demand curvesQ1=32-0.4P1, Q2=18-0.1P2

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

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

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

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