Consider monopolist facing two customer groups

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Consider a monopolist facing two customer groups. The first has demand p1 = 10 - q/2 and the second has demand p2 = 20 - q. The firm has marginal cost MC(q) = q, where q = q1 + q2 is the total amount sold.

Suppose a regulator could set one per unit price for everyone and knows the demand and marginal cost curves. What price should it set for the two groups to minimize deadweight loss?

Reference no: EM131098341

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