You are the manager of a monopoly that sells a product to two groups of consumers in different parts of the country. Group 1’s elasticity of demand is -6, while group 2’s is -3. Your marginal cost of producing the product is $70.
a. Determine your optimal markups and prices under third-degree price discrimination.
Markup for group 1:
Price for group 1: $
Markup for group 2:
Price for group 2: $