Monopolist demand curve and curve are separate

Assignment Help Business Economics

Reference no: EM13896001

A monopolist demand curve and MR curve are separate. There are two different customers with two different elasticities but you still want to maximize profit (with MR=MC for each customer separately). A price discriminating defence monopolist manufacturer has a marginal cost of MC = $200. The monopolist can segment the market into two different groups: Customer A has a demand for guns

P = 400 -.5Q and MR=400-Q. Customer B demand is P = 300 – Q and MR=300-2Q. How many guns and at what price should the producer sell to each customer? Quantify why is price discrimination – two different prices - better for the producer than a one standard price? Pick any reasonable one standard price and examine if the revenue would be higher or lower? Make a conclusion about price discrimination as a strategy.

Reference no: EM13896001

Questions Cloud

De?ne what is meant by a continuous variable : De?ne what is meant by a continuous variable and give some examples. De?ne what is meant by a continuous probability distribution.

Total compensation-banks spread : In a recent year, a bank earned $12 million in interest on its assets of $177 million, it paid out $8 million in interest on its liabilities (excluding capital) of $172 million, and it paid its workers $3 million in total compensation. The bank's spr..

What conflict rituals exist in your relationship? : What conflict rituals exist in your relationship?

Large scale operations are more or less efficient : Would you argue that large scale operations are more or less efficient or that they have too much market power? Do they reduce consumer choice? What is your position?

Monopolist demand curve and curve are separate : A monopolist demand curve and MR curve are separate. There are two different customers with two different elasticities but you still want to maximize profit (with MR=MC for each customer separately). A price discriminating defence monopolist manufact..

Welfare-maximizing quantity of drinks is welfare-maximizing : Consider two firms: a yoga studio and a bar. The bar produces noise which reduces the price that the yoga studio can charge from its customers.Assume that the bar can sell an unlimited amount of drinks at the market price p and its marginal cost incr..

Monetary policy actions affect usbusinesses-households : During the 2008 financial crisis and the subsequent recession, how did major U.S. banks respond to the actions of the Federal Reserve? How did those monetary policy actions affect U.S. businesses and households? 3. How were the actions of the Federal..

What price the total quantity demanded by the two consumers : Suppose consumer 1 has the demand function given by D1(p) = 15−p and consumer 2 has the demand function given by D2(p) = (20 − p)/3. At what price the total quantity demanded by the two consumers is 7?

What is the annual equivalent cost for the truck : The initial cost of a pickup truck is $10323 and will have a salvage value of $3850 after five years. Maintenance is estimated to be a uniform gradient amount of $160 per year, with zero dollar for first year maintenance. The operation cost is estima..

User Account

All Pages