« previous next »

Author Question: A monopolist sells to two consumer groups, students and non-students. Demand for students: Q = ... (Read 98 times)

dejastew

  • Hero Member
  • *****
  • Posts: 562
on: Jul 1, 2018
A monopolist sells to two consumer groups, students and non-students.
 
  Demand for students: Q = 500 - 1/2P
   Demand for non-students: Q = 750 - 2P
   MC = 20
 
  Find the profit-maximizing price/quantity combination in each market if the groups can be separated.

Question 2

Because firms selling a homogeneous product set price in response to the (perceived) pricing decision of other firms in the Bertrand Model of oligopoly in equilibrium price exceeds marginal cost.
 
  Indicate whether the statement is true or false


jaykayy05

  • Sr. Member
  • ****
  • Posts: 329
Reply #1 on: Jul 1, 2018
Answer to Question 1

Students:
P = 1000 - 2Q
MR = 1000 - 4Q
Set MR = MC. 20 = 1000 - 4Q
245 = Q, P = 510

Non-students:
P = 375 - 1/2 Q
MR = 375 - Q
Set MR = MC. 20 = 375 - Q
355 = Q, P = 197.50

Answer to Question 2

False. Because firms set price and sell a homogeneous product other firms will always set price lower if a firm prices above marginal cost. In equilibrium all firms charge P=MC (same as the competitive equilibrium)


Related Topics

Need homework help now?

Ask unlimited questions for free

Ask a Question
« previous next »
 

Did you know?

More than 4.4billion prescriptions were dispensed within the United States in 2016.

Did you know?

Essential fatty acids have been shown to be effective against ulcers, asthma, dental cavities, and skin disorders such as acne.

Did you know?

Although not all of the following muscle groups are commonly used, intramuscular injections may be given into the abdominals, biceps, calves, deltoids, gluteals, laterals, pectorals, quadriceps, trapezoids, and triceps.

Did you know?

A recent study has found that following a diet rich in berries may slow down the aging process of the brain. This diet apparently helps to keep dopamine levels much higher than are seen in normal individuals who do not eat berries as a regular part of their diet as they enter their later years.

Did you know?

The highest suicide rate in the United States is among people ages 65 years and older. Almost 15% of people in this age group commit suicide every year.

Nitrogenous wastes produced by different animal groups. Nitrogenous wastes produced by different animal groups.
Angry jeers from whites rain down on Elizabeth Eckford, one of the first African American students ... Angry jeers from whites rain down on Elizabeth Eckford, one of the first African American students ...
Attention and memory are in demand during circle time. Attention and memory are in demand during circle time.
Funeral Rituals and Practices among U.S. Cultural Groups Funeral Rituals and Practices among U.S. Cultural Groups
A demand delivery system uses a fuel-pressure regulator attached to the fuel pump assembly inside ... A demand delivery system uses a fuel-pressure regulator attached to the fuel pump assembly inside ...
Basic Food Groups and Their Major Nutrients Basic Food Groups and Their Major Nutrients
Video: Endocytosis - pinocytosis, receptor mediated and Transcytosis

For a complete list of videos, visit our video library