Answer to Question #185339 in Macroeconomics for HASAN ALI KHAN

Question

function are                                                                                                                        

P₁ = 80 – 2.5Q₁

P₂ = 180 – 10Q₂

The monopolist total cost

TC = 50 + 40Q

Determine the price to be charged in the two markets and amount of output to be sold in each market so that profit is maximize. find the total profit to be made from the strategy of price discrimination.

Answer 1

$$Q_1=320-4p_1$$

$$Q_2=18-0.1p_2$$

$$Q=Q_1+Q_2$$

$$Q=338-4p_1-0.1p_2$$

$$MC_1=MC_2=40$$

$$TR_1=p_1Q_1=320p_1-4p_1^2$$

$$MR_1=320-8p_1$$

$$p_1=35$$

$$Q_1=180$$

$$TR_2=p_2Q_2=18p_2-0.1p_2^2$$

$$MR_2=18-0.2p_2$$

$$p_2=1.1$$

$$Q_2=16.9$$