Total consumers can be divided into Group A and Group B, and it is assumed that a monopoly company makes third-degree price discrimination. The demand function of each group and the cost function of the company are as follows. QA = 10-PA, QB = 12-2 PB, C(Q) = Q2 (1) Find the third-order price discrimination price that maximizes the profit of the company. (2) Assume that price discrimination between groups is prohibited by law. Find the maximum profit price.
Total consumers can be divided into Group A and Group B, and it is assumed that a monopoly company makes third-degree price discrimination. The demand function of each group and the cost function of the company are as follows. QA = 10-PA, QB = 12-2 PB, C(Q) = Q2 (1) Find the third-order price discrimination price that maximizes the profit of the company. (2) Assume that price discrimination between groups is prohibited by law. Find the maximum profit price.
Chapter8: Monopoly
Section: Chapter Questions
Problem 17SQ
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Q. Total consumers can be divided into Group A and Group B, and it is assumed that a
QA = 10-PA, QB = 12-2 PB, C(Q) = Q2
(1) Find the third-order price discrimination price that maximizes the profit of the company.
(2) Assume that price discrimination between groups is prohibited by law. Find the maximum profit price.
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