What is the marginal cost that kim faces

Reference no: EM132745360

Question: Consider the following description of the market for Taedonggang beer in North Korea. Kim. the monopolist beer producer. faces a demand curve given by the equation p=100-3q, where p is the price of one bottle and q the quantity of bottles demanded for that price. Kim's cost of producing q bottles is given by c = 4q. Assume that Kim behaves as a simple monopolist.

Answer each of the following questions

A. What is the marginal cost that Kim faces?

B. What is the marginal Revenue curve?

C. Compute Kim's profit as a simple monopolist.

D. Compute Kim's profit as a first degree discriminating monopolist.

Assume now that Kim can charge a different price for party members. for non party members. and for himself. The demand by party members is given by, p = 99 - 4.5q and that of non party-members is p = 99 - 9q. Kim also has a demand which is always one-third of a bottle at any price below 100

E. Show that the total demand (party members plus non party members plus Kim) is equal to p = 100 - 3q , as above.

F. Compute the price for party mernbers, the price for non party members. the price for himself and the new total profit of Kim. Is he better off than he was in question 'C' above?

Reference no: EM132745360

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