The accompanying graph depicts the marginal revenue (MR), demand (D), and marginal cost (MC) curves for a monopoly. Suppose the monopolist able to successfully price discriminate between two groups by charging one group $60 and charging $35 to the other group. c. What are the firm's profits if it charges the two prices as mentioned above?
The accompanying graph depicts the marginal revenue (MR), demand (D), and marginal cost (MC) curves for a monopoly. Suppose the monopolist able to successfully price discriminate between two groups by charging one group $60 and charging $35 to the other group. c. What are the firm's profits if it charges the two prices as mentioned above?
Principles of Economics 2e
2nd Edition
ISBN:9781947172364
Author:Steven A. Greenlaw; David Shapiro
Publisher:Steven A. Greenlaw; David Shapiro
Chapter9: Monopoly
Section: Chapter Questions
Problem 33P: Draw a monopolists demand curve, marginal revenue, and marginal cost curves. Identify the...
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The accompanying graph depicts the marginal revenue (MR),
Suppose the monopolist able to successfully
c. What are the firm's profits if it charges the two prices as mentioned above?
Transcribed Image Text:The accompanying graph depicts the marginal revenue
(MR), demand (D), and marginal cost (MC) curves for a
monopoly.
a. Place point P, at the profit maximizing price and
quantity assuming that the monopolist can only charge a
single price.
b. What are the profits of the firm if it charges a single
price?
$ 1225
Suppose the monopolist able to successfully price
discriminate between two groups by charging one group S
60 and charging $35 to the other group.
c. What are the firm's profits if it charges the two prices as
mentioned above?
Price and Costs(5)
100
82822233*2****222*
95
90
85
80
75
70
65
60
55
50
35
30
15
10
5
0
MC
MR
D
0 5 10 15 20 25 30 35 40 45 50 55 60 65 70 75 80 85 90 95 100
Quantity
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