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A monopoly sells drugs in the german and U.S. market. The German demand function is Qg= 900-Pg, and the U.S. demand function is Qus= 1,000-Pus. The firm's marginal cost is constant and equals 300 in both countries.
a) Find the profit maximizing output levels and price of the firm in the two markets. Show your workings.
b) Find the price of elasticity of demand in the two markets at the profit maximizing price level in a)
c) With reference to your answers to a) and b), explain how a monopoly firm should set its prices in two different markets.
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Mountain Man Brewing, a family owned business where Chris Prangel, the son of the president joins. Due to increase in the preference for light beer drinkers, Chris Prangel wants to introduce light beer version in Mountain Man. An analysis into the la..
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