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Assume that a monopolist faces two groups of consumers. The first group demand function is: P1=160-8Q1. The second group demand function is: P2=80-1/2Q2. The monopolist has the total cost function TC(Q)=1/2Q^2+4Q, where Q=Q1+Q2. A) Determine total revenue from group i, as it depends on output sold to group i, i=1,2 B) Given answer in A, determine total revenue that monopolist derives from both groups. C) Given your answer in B and TC(Q), determine how much output the profit maximizing monopolist will sell to group i, i=1,2. What prices will the monopolist charge the groups? what will monopolist profit be?
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