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A monopolist sells output to two kinds of customers. Type 1 customers have annual demand of Q1 = 60-p and type 2 customers have annual demand of Q2 = 80-p. There are equal numbers of each type. Assume there are no fixed costs and the marginal cost of 1 is equal to $20 (or C(q) = 20q). If the monopolist can separate the two types of customers by visual inspection and price discriminate, what is the monopolists optimal pricing policy?
economists believe that when two countries specialize and trade each will be able to buy goods in which the other
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Draw the budget constraint showing the trade-off between lifetime consumption and number of children. (Ignore the fact that children come only in whole numbers!) Show indifference curves and an optimum choice.
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