A monopolist sells in two geographically divided markets, the East and the West
Question # 00030023
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Updated on: 10/31/2014 01:28 AM Due on: 03/31/2015
A monopolist sells in two geographically divided
markets, the East and the West. Marginal cost is
constant at $50 in both markets. Demand and marginal
revenue in each market are as follows:
QE = 900 - 2PE
MRE = 450 - QE
QW = 700 - PW
MRW = 700 - 2QW
a. Find the profit-maximizing price and quantity in
each market.
b. In which market is demand more elastic?
markets, the East and the West. Marginal cost is
constant at $50 in both markets. Demand and marginal
revenue in each market are as follows:
QE = 900 - 2PE
MRE = 450 - QE
QW = 700 - PW
MRW = 700 - 2QW
a. Find the profit-maximizing price and quantity in
each market.
b. In which market is demand more elastic?
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Solution: A monopolist sells in two geographically divided markets, the East and the West