Question

The following data applies to the next 3 questions . A monopolist is currently selling 4000 units in market A at P The monopolist could sell 6000 units in market B at P = $14 $20 . 6,0, 4:24, ooo 62D 68o.o .Marginal cost is constant and equal to S11 in both markets. 36. If the monopolist cannot price discriminate between the two markets then the marginal revenue of increasing output from 4000 (serve A only) to 10,000 (serve A and B) is which means that profitsif market B is served. a) $6 b) $8 c) $10 d) $14 c S14 rise, fall or stay constant depending on the level of fixed cost fall fall fall rise 37. If the monopolist can price discriminate between the two markets then the marginal revenue of increasing output from 4000 (serve A only) to 10,000 (serve A and B) is which means that profits willif market B is served a) $6 b) $8 c) $10 fall d) $14 e S14 rise, fall or stay constant depending on the level of fixed cost fall fall ise 38. Now suppos ulator im 17 th ma in nd ia the monopolist cannot price discriminate. Marginal revenue is for serving market A only. Marginal revenue of increasing output from 5000 (serve A only) to 10,000 (serve A and B) is The regulated monopolist willin order to maximize profits. a) $17 b) $20 c) $17 d) $20 e $20S17 $17 $14 serve both markets serve both markets serve both markets serve market A only serve both markets $10

Answer 1