Suppose a monopolist produces in a market with two distinct segments: market 1, which is denoted as M1 on the graph, and market 2,denoted as M2. The firm's marginal and average costs are $20.$120$110$100$90$70PriceM1 MRM$60$50Price M2$40MR19MC = $20$30$20DemandM1Demand M2120110$10701000.20QuantityInstructions: Enter your answers as a whole number.a. What is the firm's profit in market 1?2$875b. What is the firm's profit in market 2?%24375c. In which market is demand more elastic?Market 2Price ($)9080

There are two markets, i.e., market 1 and market 2, in which a monopolist operates. The monopolist…

Suppose a monopolist produces in a market with two distinct segments: market 1, which is denoted as M1 on the graph, and market 2, denoted as M2. The firm's marginal and average costs are $20. $120 $110 $100 $90 $80 A $70 PriceM1 MRM1 $60 $50 $40 PriceM2 $30 MC = $20 $20 $10 Demandw2 DemandM1 110 Quantity Instructions: Enter your answers as a whole number. a. What is the firm's profit in market 1? Price ($)

Suppose a monopolist produces in a market with two distinct segments: market 1, which is denoted as M1 on the graph, and market 2, denoted as M2. The firm's marginal and average costs are $20. $120 $110 $100 $90 $80 A $70 PriceM1 MRM1 $60 $50 $40 PriceM2 $30 MC = $20 $20 $10 Demandw2 DemandM1 110 Quantity Instructions: Enter your answers as a whole number. a. What is the firm's profit in market 1? Price ($)

Survey Of Economics

10th Edition

ISBN:9781337111522

Author:Tucker, Irvin B.

Publisher:Tucker, Irvin B.

Chapter8: Monopoly

Section: Chapter Questions

Problem 15SQ

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Question

Suppose a monopolist produces in a market with two distinct segments: market 1, which is denoted as M1 on the graph, and market 2,
denoted as M2. The firm's marginal and average costs are $20.
$120
$110
$100
$90
$70
PriceM1 MRM
$60
$50
Price M2
$40
MR19
MC = $20
$30
$20
DemandM1
Demand M2
120
110
$10
70
100
0.
20
Quantity
Instructions: Enter your answers as a whole number.
a. What is the firm's profit in market 1?
2$
875
b. What is the firm's profit in market 2?
%24
375
c. In which market is demand more elastic?
Market 2
Price ($)
90
80

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