A firm with a monopoly in two markets with different


Explain, using an example, why the following versions of a profit-maximizing approach to price discrimination are not correct:

(a) A firm with Monopoly in two markets and the same costs of serving them should charge a higher price in that market with a higher demand.

(b) A firm with a Monopoly in two markets with different marginal costs should always charge a higher price in the market with the higher marginal costs.

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Managerial Economics: A firm with a monopoly in two markets with different
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