Question: A monopoly faces the following inverse-demand functions in two markets: P=300 2. q1, P2-200 - 2-42. It produces output using a single plant with

A monopoly faces the following inverse-demand functions in two markets: P=300 2.

A monopoly faces the following inverse-demand functions in two markets: P=300 2. q1, P2-200 - 2-42. It produces output using a single plant with the following cost function: C=20- (q, +9,). (a) Suppose this is a price-discriminating monopoly. Find the profit-maximizing levels of output in each market and the corresponding prices. Check if the second-order conditions are satisfied. (b) Suppose the monopoly cannot price discriminate bccause a new law makes it illegal to do so. Find the profit-maximizing levels of output in each market and the corresponding price. Check if the second-order conditions are satisfied. (c) How much profit is gained or lost as a consequence of the new law?

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