A price-discriminating monopoly sells in two markets whose

Question

Question: 1. A price-discriminating monopoly sells in two markets whose demand schedules are

p₁ = 12.5 - 0.0625q₁       p₂ = 7.2 - 0.002q₂

and faces the horizontal marginal cost schedule MC = 5.

What price and output should it choose for each market?

2. A monopoly faces the horizontal marginal cost schedule MC = 42 and can operate a two-part pricing scheme in the market with the demand schedule

p = 180 - 0.6q

If the first 100 units are sold at a price of £120 each, what price should be charged for the remaining units in order to maximize profit?