A monopolist sells in two markets that have demand functions given by D1 (p1) = 200 - p1 and D2(p2) = 100 – (1/3) P2 The marginal cost of production is constant at c=60

Economics Dec 28, 2021

A monopolist sells in two markets that have demand functions given by D1 (p1) = 200 - p1 and D2(p2) = 100 – (1/3) P2 The marginal cost of production is constant at c=60. (a) Assume the firm can charge different prices to each group. What are the equilibrium quantities in markets 1 and 2? (15 points) 1 (b) Suppose the firm can charge only one price. Thus, its market demand is D(p) = 300 - {p. Calculate the Deadweight Loss (DWL) of the monopoly. (10 points)