A monopoly can produce any level of output it wishes at a constant marginal (and average) cost of $5 per unit. Assume the monopoly sells its goods in two different markets separated by some distance. The demand curve in the first market is given by Q1 = 55 - P1, and the demand curve in the second market is given by Q 2 = 70 - 2P2
i. If the monopolist can maintain the separation between the two markets, what level of output should be produced in each market, and what price will prevail in each market?
If the monopoly powers broke and the monopolist is constrained to behave like a perfectly competitive firm, how would the answers in part i above change? What is the value of dead weight loss in the two markets due to monopoly existence?
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a monopoly face demand schedule p=230-q and the demand function and the cost schedule TC=10+0.25q2 then determine the elasticity of demand of maximum revenues ?
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