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In: Economics

Suppose a monopolist is practicing price discrimination in the sale of a product by charging different...

Suppose a monopolist is practicing price discrimination in the sale of a product by charging different prices in two separate markets. Suppose the demand curves are

P1=300-Q1         P2=250-Q2

and you are informed that the cost function is TC=6(Q1+Q2).

  1. How much should be sold in the two markets to maximize profits?

  2. What are the prices charged?

  3. How much profit is lost if price discrimination is made illegal?

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