Price elasticity of demand for two products-marginal cost

Reference no: EM1316846

You are the manager of a monopoly that sells a product to two groups of consumers in different parts of the country. Group 1's elasticity of demand is -2, while group 2's is -6. Your marginal cost of producing the product is $10.

a. Determine your optimal markups and prices under third-degree price discrimination.
b. Identify the conditions under which third-degree price discrimination enhance profits.

Reference no: EM1316846

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