A monopolist is deciding how to allocate output between two geographically separated markets
(East Coast and Midwest). Demand and marginal revenue for the two markets are:
P1 = 15 - Q1 -------> MR1 = 15 - 2Q1
P2 = 25 - 2(Q2) -------->MR2 = 25 - 4(Q2)
The monopolists total cost is C = 5 - 3(Q1 + Q2 ). What are price, output, profits, marginal revenues, and deadweight loss if
(a) the monopolist can price discriminate?
(b) if the law prohibits charging deferent prices in the two regions?