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Now, consider a situation where the monopolist is considering price discrimination by selling in two different...

Now, consider a situation where the monopolist is considering price discrimination by selling in two different countries, a high income country (1) and a low income country (2). In country 1, it faces the demand curve P1 = 120 – 7Q1 and in country 2, P2 = 60 – 2Q2. Its total cost function is still the same, TC = 8Q2 + 5

Derive the MC function for the monopolist. Derive the MR function in each country.

Determine the price it should charge and the quantity of output that it should sell in each country.

Calculate the profit the monopolist would make in each country.

As one of the top management personnel in your organization, how will you advise your CEO regarding the merger and the potential price discrimination?

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Answer #1

Here I have shared the solution of all your mathematical parts.

And to answer about that advice by management personnel, we will require solutions of previous part of your question.

Hope your question is answered properly.

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