Quiz 23. Group Pricing

Quiz 23. Group Pricing - C ( Q ) = Q 2 , where Q = Q 1 + Q...

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Shomu Banerjee ECON 201 GROUP PRICING QUIZ A monopolist engages in third degree differential pricing (i.e., group pricing) across two markets with demand curves given by P 1 = 60 – 0.5 Q 1 and P 2 = 80 – Q 2 . Its cost function is given by
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Unformatted text preview: C ( Q ) = Q 2 , where Q = Q 1 + Q 2 , implying that his marginal cost is MC = 2 Q = 2( Q 1 + Q 2 ). What are the profit-maximizing quantities ( Q 1 * and Q 2 * ) sold in each market and at what price ( P 1 * and P 2 * )?...
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This note was uploaded on 10/26/2010 for the course ECONOMICS ECON 201 taught by Professor Dr.shomubanerjee during the Summer '07 term at Emory.

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