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Find the price in each market that maximizes

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Reference no: EM132586825

A monopolist produces for two, geographically distinct markets. The demand in market A is qA = 72-3p
and the demand in market B is qB = 40 - 2p. The firm's total cost function is C(qA + qB) = 5 + 2(qA + qB).

The cost of transporting a good between the two markets is t.

a. Suppose that transportation cost is t = 0. Find the price in each market that maximizes the monopolist's profits. What are the corresponding quantities in each market?

b. Suppose instead t = ∞. Find the price in each market that maximizes the monopolist's profits. What  are the corresponding quantities in each market?

c. Suppose instead t = 1. Find the price in each market that maximizes the monopolist's profits. What are the corresponding quantities in each market?

Reference no: EM132586825

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