LS1372: Consider a monopolist facing the following demand and cost curves

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Question: Consider a monopolist facing the following demand and cost curves.

P = 50-2QC = 25+10Q

(Hint: Total demand at any point P will be the summation of two quantities)

Suppose the firm is able to separate its customers in two distinct markets with the following demand functions.

Pi =40-2.5Qi P2 = 90-10Q2

From the above equation calculate the following:

i) Total demand

ii) Marginal Revenue

iii) Marginal Cost


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