27. A profit maximizing monopolists sold her output in 2 markets. When the monopolists se up prices at P₁=9 and P₂-4, then the elasticities are e₁=-0.4 and e2=-3. Under such situation which one must hold? a) profit is maximized b) MR1=MR2 c) P₁ falls and P₂ rises d) P2 rises e) all are not possible
27. A profit maximizing monopolists sold her output in 2 markets. When the monopolists se up prices at P₁=9 and P₂-4, then the elasticities are e₁=-0.4 and e2=-3. Under such situation which one must hold? a) profit is maximized b) MR1=MR2 c) P₁ falls and P₂ rises d) P2 rises e) all are not possible
Chapter9: Monopoly
Section: Chapter Questions
Problem 3.4P
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Transcribed Image Text:27. A profit maximizing monopolists sold her output in 2 markets. When the monopolists set
up prices at P₁=9 and P₂-4, then the elasticities are e₁=-0.4 and e2=-3. Under such situation
which one must hold?
a) profit is maximized b) MR1=MR2 c) P₁ falls and P₂ rises d) P₂ rises e) all are not possible
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