# 67 - Homework 2 Summer 2010 Econ 445 Use the following...

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Unformatted text preview: Homework 2 Summer 2010 Econ 445 Use the following information for Questions 1 ~ 3 Raoul Duke is a mo— nopolist in the market for Golf Shoes. He-has identiﬁed the market into two different segments, who for simplicity we shall call Samoans and Reporters. He knows the market demand for both segments: Reporters : P(Q) : 4O — 2Q Someone : P(Q) : 60 — 262 He himself faces a cost function: 2 C(Q) = 4Q+ “Q— 1 Assume Raoul cannotprice discriminate, so that he must charge one uniform price to both markets. a) Determine Raoul’s marginal revenue by adding up the market quantities for both groups like we did in class. Your answer should be a piecewise funciton. b) Determine Raoul’s optimal market quantity and price charged. In addi— tion, specify how much of each group demands of the total quantity. c) Determine Raonl’s resultant proﬁts. d) Was it in his best interest to sell to both groups? ...
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