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Suppose the market demand can be separated into two distinct markets, where, p1= 80-5y1, p2=180-2y2, and...

Suppose the market demand can be separated into two distinct markets, where, p1= 80-5y1, p2=180-2y2, and the common cost function is C=50+40(y1+y2).

Determine the equilibrium prices and quantities in each market and the overall profits that result from actions of a third degreeprice-discriminating monopoly.

Determine the price elasticity of demand in each market, evaluated at the equilibrium prices and quantities.

What is the relationship between the price elasticity of the demand in each market and the price prevailing in each market?

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Expert Solution

Rahul Sunny answered 2 years ago
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