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The accompanying graph depicts the marginal revenue (MR), demand (D), and marginal cost (MC) curves for a monopoly. a. Place point P₁ at the profit maximizing price and quantity assuming that the monopolist can only charge a single price. b. What are the profits of the firm if it charges a single price? $ Suppose the monopolist able to successfully price discriminate between two groups by charging one group $60 and charging $35 to the other group. c. What are the firm's profits if it charges the two prices as mentioned above? Price and Costs($) 100 5 90 5 80 75 70 5 0 55 50 5 0 35 30 25 20 15 10 50 95 85 65 60 45 40 P MC MR 05 10 15 20 25 30 35 40 45 50 55 60 65 70 75 80 85 90 95100 Quantity

The accompanying graph depicts the marginal revenue (MR), demand (D), and marginal cost (MC) curves for a monopoly. a. Place point P₁ at the profit maximizing price and quantity assuming that the monopolist can only charge a single price. b. What are the profits of the firm if it charges a single price? $ Suppose the monopolist able to successfully price discriminate between two groups by charging one group $60 and charging $35 to the other group. c. What are the firm's profits if it charges the two prices as mentioned above? Price and Costs($) 100 5 90 5 80 75 70 5 0 55 50 5 0 35 30 25 20 15 10 50 95 85 65 60 45 40 P MC MR 05 10 15 20 25 30 35 40 45 50 55 60 65 70 75 80 85 90 95100 Quantity

Managerial Economics: A Problem Solving Approach
Managerial Economics: A Problem Solving Approach
5th Edition
ISBN:9781337106665
Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Publisher:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Chapter14: Indirect Price Discrimination
Section: Chapter Questions
Problem 6MC
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The accompanying graph depicts the marginal revenue (MR), demand (D), and marginal cost (MC) curves for a monopoly. a. Place point P₁ at the profit maximizing price and quantity assuming that the monopolist can only charge a single price. b. What are the profits of the firm if it charges a single price? $ Suppose the monopolist able to successfully price discriminate between two groups by charging one group $60 and charging $35 to the other group. c. What are the firm's profits if it charges the two prices as mentioned above? Price and Costs($) 100 95 90 85 80 75 70 65 60 55 50 45 40 35 30 25 20 15 10 5 0 a MC MR D 0 5 10 15 20 25 30 35 40 45 50 55 60 65 70 75 80 85 90 95100 Quantity
Transcribed Image Text:The accompanying graph depicts the marginal revenue (MR), demand (D), and marginal cost (MC) curves for a monopoly. a. Place point P₁ at the profit maximizing price and quantity assuming that the monopolist can only charge a single price. b. What are the profits of the firm if it charges a single price? $ Suppose the monopolist able to successfully price discriminate between two groups by charging one group $60 and charging $35 to the other group. c. What are the firm's profits if it charges the two prices as mentioned above? Price and Costs($) 100 95 90 85 80 75 70 65 60 55 50 45 40 35 30 25 20 15 10 5 0 a MC MR D 0 5 10 15 20 25 30 35 40 45 50 55 60 65 70 75 80 85 90 95100 Quantity
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