Output between two geographically separated markets

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Reference no: EM13818492

A monopolist is deciding how to allocate output between two geographically separated markets

(East Coast and Midwest). Demand and marginal revenue for the two markets are:

P1 = 15 - Q1 -------> MR1 = 15 - 2Q1

P2 = 25 - 2(Q2) -------->MR2 = 25 - 4(Q2)

The monopolists total cost is C = 5 - 3(Q1 + Q2 ). What are price, output, profits, marginal revenues, and deadweight loss if

(a) the monopolist can price discriminate?

(b) if the law prohibits charging deferent prices in the two regions?

Reference no: EM13818492

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