Determining optimal markups and prices

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Reference no: EM1370692

You're the manager of monopoly that sells the product to two groups of consumers in different parts of country. Group 1's elasticity of demand is -2, while group 2's is -6. your marginal cost of producing the product is $10.

A) Find out your optimal markups and prices under third-degree price discrimination.

B) Determine the conditions under which third-degree price discrimination enhances profits.

Reference no: EM1370692

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