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Microeconomic Theory

Microeconomic Theory

12th Edition

ISBN:9781337517942

Author:NICHOLSON

Publisher:NICHOLSON

Chapter14: Monopoly

Section: Chapter Questions

Problem 14.5P

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A monopoly sells its good in the U.S. and Japanese markets. The American inverse demand function is Pa = 100 - Qa,
and the Japanese inverse demand function is Pj = 80-2Qj, where both prices (Pa, Pj) are measured in dollars. The firm's
marginal cost of production is MC = $15 in both countries. If the firm can prevent resales, what price will it charge in
both markets? Solve for: Equilibrium Price in Japan = ? and Equilibrium Price in U.S = ?

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