Problem
A monopolist faces two distinct markets A and B for her product, and she is able to insure that resale is not possible. The demand curves in these markets are given by P = 20 - (1/4)QA and P = 14-(1/4)QB. The marginal cost is constant: MC = 4. There are no fixed costs.
(a) Calculate the profit maximizing price and quantity in each market.
(b) Compute the total profit made as a result of this discriminatory pricing.
The response should include a reference list. Double-space, using Times New Roman 12 pnt font, one-inch margins, and APA style of writing and citations.