A lobster fisherman sells lobsters in a seaside town in Maine. The lobster fisherman is a local monopolist. The lobsters can be caught at a total cost of C(Q)=50+2Q². The local demand for lobsters, measured in pounds, is as follows: P=60-4Q. Find the profit-maximizing price and quantity of lobster chosen by this monopolist. (Assume that the same price must be charged to all customers.) a. The fisherman learns that the demand for lobster from restaurants in a small town in Michigan is as follows: P= 84 - 5Q. The fisherman decides to sell as a monopolist in this Michigan market as well. Assume for simplicity that the same costs (as above) apply for serving this market. Find the profit-maximizing price and quantity of lobster the monopolist will charge and sell in this second b. market. Briefly explain two reasons why the monopolist will be able to succeed at price discriminating across the two markets. с.
A lobster fisherman sells lobsters in a seaside town in Maine. The lobster fisherman is a local monopolist. The lobsters can be caught at a total cost of C(Q)=50+2Q². The local demand for lobsters, measured in pounds, is as follows: P=60-4Q. Find the profit-maximizing price and quantity of lobster chosen by this monopolist. (Assume that the same price must be charged to all customers.) a. The fisherman learns that the demand for lobster from restaurants in a small town in Michigan is as follows: P= 84 - 5Q. The fisherman decides to sell as a monopolist in this Michigan market as well. Assume for simplicity that the same costs (as above) apply for serving this market. Find the profit-maximizing price and quantity of lobster the monopolist will charge and sell in this second b. market. Briefly explain two reasons why the monopolist will be able to succeed at price discriminating across the two markets. с.
Chapter14: Monopoly
Section: Chapter Questions
Problem 14.9P
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Transcribed Image Text:A lobster fisherman sells lobsters in a seaside town in Maine. The lobster fisherman is a
local monopolist. The lobsters can be caught at a total cost of C(Q)=50+2Q². The local
demand for lobsters, measured in pounds, is as follows: P=60-4Q.
Find the profit-maximizing price and quantity of lobster chosen by this
monopolist. (Assume that the same price must be charged to all customers.)
a.
b.
The fisherman learns that the demand for lobster from restaurants in a small
town in Michigan is as follows: P= 84 - 5Q. The fisherman decides to sell as
a monopolist in this Michigan market as well. Assume for simplicity that the
same costs (as above) apply for serving this market. Find the profit-maximizing
price and quantity of lobster the monopolist will charge and sell in this second
market.
Briefly explain two reasons why the monopolist will be able to succeed at price
discriminating across the two markets.
с.
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