A monopolist is seeking to price discriminate by segregating the market. The dem

Question

A monopolist is seeking to price discriminate by segregating the market. The demand in each market is given as follows: Market A: P-162-2Q Market B: P-169-2Q The monopolist faces a marginal cost of $16 and has no fixed costs. Given this information, what price should the monopolist charge in Market B? Round your answer to two decimal places. Do not include a $sign Note: The demand equations presented above show P equal to a function of Q, rather than the usual other way around. This is so you can use the same trick used in Unit 11 to the marginal revenue curve.

Explanation / Answer

Ans)

MC=16

P=169-2Q
TR=Pq
TR=(169-2Q)Q
MR=dTR/dQ
MR=169-4Q

Mc=Mr
169-4Q=16
4Q=169-16
4Q=153
Q=38.25

P=169-2Q
P=169-2(38.25)=92.5~93

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