5. There are only two consumers in a city. Consumer A has demand qA = 10 - p and Consumer B has demand qB = 15 - 3p. The monopolist can tell the two consumers apart. The total cost function of the monopolist is TC = q with q being the total quantity produced. (a) Assume that the laws of the city force the monopolist to use a single price. Find the price that maximizes the monopolist's profit. (b) Assume that the monopolist can use whatever pricing strategy they want. What is the one that maximizes profit?
5. There are only two consumers in a city. Consumer A has demand qA = 10 - p and Consumer B has demand qB = 15 - 3p. The monopolist can tell the two consumers apart. The total cost function of the monopolist is TC = q with q being the total quantity produced. (a) Assume that the laws of the city force the monopolist to use a single price. Find the price that maximizes the monopolist's profit. (b) Assume that the monopolist can use whatever pricing strategy they want. What is the one that maximizes profit?
Micro Economics For Today
10th Edition
ISBN:9781337613064
Author:Tucker, Irvin B.
Publisher:Tucker, Irvin B.
Chapter13: Antitrust And Regulation
Section: Chapter Questions
Problem 10SQP
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Transcribed Image Text:5. There are only two consumers in a city. Consumer A has demand q4 = 10 - p and Consumer B has
demand qg = 15 – 3p. The monopolist can tell the two consumers apart. The total cost function of
the monopolist is TC = q with q being the total quantity produced.
(a) Assume that the laws of the city force the monopolist to use a single price. Find the price that
maximizes the monopolist's profit.
(b) Assume that the monopolist can use whatever pricing strategy they want. What is the one that
maximizes profit?
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