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A firm with a monopoly in two markets

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Explain, using an example, why the following versions of a profit-maximizing approach to price discrimination are not correct:

(a) A firm with Monopoly in two markets and the same costs of serving them should charge a higher price in that market with a higher demand.

(b) A firm with a Monopoly in two markets with different marginal costs should always charge a higher price in the market with the higher marginal costs.

Reference no: EM13974405

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