6. A monopolist is seeking to price discriminate by segregating the market. The

Question

6. A monopolist is seeking to price discriminate by segregating the market. The demand in each market is given as follows:

Market A: P = 114 - 4Q
Market B: P = 101 - 1Q

The monopolist faces a marginal cost of $25 and has no fixed costs. Given this information, what price should the monopolist charge in Market B?

Round your answer to two decimal places. Do not include a $ sign.

Note: The demand equations presented above show P equal to a function of Q, rather than the usual other way around. This is so you can use the same trick used in Unit 11 to find the marginal revenue curve.

Explanation / Answer

now a monopolist produces in such way that MR = MC , and charges prices above the marginal cost

so here

101-2Q = 25

SO Q = 38 AND P = 63

SO THE PRICE CHARGED BY A MONOPOLIST IN MARKET B IS 63

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