Reference no: EM13801726
The following shows the demands and marginal revenue in two markets, 1 and 2, for a price discriminating firm along with total marginal revenue, MRT, and marginal cost MC:
Compare the demand conditions in each market; i.e. how do the two markets differ in their demand for the firm’s product?
Select one:
a. Both markets have equivalent demand since MC is constant in both markets.
b. Market 1 has more demand than market 2. 1 is high demanders, 2 is low demanders.
c. Market 1 has less demand than market 2. 1 is low demanders, 2 is high demanders.
How much total output should the firm produce (for both markets combined)?
How should that output be allocated between markets 1 and 2?
What price should the firm charge in each market?
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