I need all parts answered, please. Also diagrams would be helpful. Question-3 (Monopolist Behavior)demand curves given bySuppose a monopolist faces two markets with=Di(pi) 200 piD2(p2) = 100-2p2Assume that the monopolist's cost function is c(y) = y²1. What is the optimal prices for the monopolist if it can charge different prices in these markets?2. What is the optimal price if the monopolist must charge the same price in each market?3. How much total consumers' surplus changes between the two separate prices and the sameprice cases?

1. Optimal Prices for Separate Markets:In this scenario, the monopolist can set different prices in…

Answered: Question-3 (Monopolist Behavior) demand…

ECON MICRO

5th Edition

ISBN:9781337000536

Author:William A. McEachern

Publisher:William A. McEachern

Chapter9: Monopoly

Section: Chapter Questions

Problem 6.9P

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5. Conditions for price discrimination Price discrimination is the practice of charging different prices for the same product that are not justified by cost differences. Evaluate the following statement: "Price discrimination requires market segmentation." False, because the monopolist can never charge anyone their maximum willingness to pay anyway False, because the monopolist does not need to know people's willingness to pay for its goods None of these choices True, because the monopolist needs to know the willingness to pay of different groups of consumers
A monopolist earns $70 million annually and will maintain that level of profit indefinitely, provided that no other firm enters the market. However, if another firm enters the market, the monopolist will earn $70 million in the current period and $32 million annually thereafter. The opportunity cost of funds is 12 percent, and profits in each period are realized at the beginning of each period.a. What is the present value of the monopolist’s current and future earnings if entry occurs? Note:- Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism. Answer completely. You will get up vote for sure.
One difference between a monopoly and a perfectly competitive firm is Question 7 options: a) in the long run, price equals marginal cost for the monopolist whereas for a perfectly competitive firm price equals minimum average total cost b) the monopolist is able to sustain long run economic profits whereas the perfectly competitive firm is unable to c) the monopolist produces a quantity of output where marginal revenue is greater than marginal cost (MR > MC) whereas the perfectly competitive firm produces a quantity of output where marginal revenue is equal to marginal cost (MR = MC) d) there are no fixed costs for a monopolists whereas a perfectly competitive firm has fixed costs
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Q-3: A monopolist sells in 2 markets and produces in 1 factory. Although the monopolist can charge difference prices in the two markets, it must sell all units within a market at the same price.a) Suppose this monopolist does not have a marginal cost (M C = 0). If demand in market 1 is X1(p1) = a1 −b1p1 and demand in market 2 is X2(p2) = a2 −b2p2, set up the monopolist’s profit maximization problems and solve for the market prices that result in each market.b) Under what conditions on a1, b1, a2, b2 from above will the monopolist not price discriminate?c) If demand in market i, where i = 1 , 2, is instead Xi(pi) = aipi−bi and the monopolist has some constant marginal cost of c, where c > 0, set up the monopolist’s profit maximization problem and solve for the market prices.d) Under what conditions on a1, b1, a2, b2 from above will the monopolist not price discriminate?
Q1-Select the true or false for the following statement also give the explanation and support your answer with graphical presentation where necessary. Explanation is compulsory 3 to 6 line. A monopoly maximizes profit by choosing the quantity at which marginal revenue greater than marginal cost.
Q1-Select the true or false for the following statement also give the explanation and support your answer with graphical presentation where necessary. Explanation is compulsory 3 to 6 line. The key difference between a competitive firm and a monopoly is the ability to influence the price.

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