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Economics - Price Discrimination
A monopoly sells in two markets.
The inverse demand curve in market 1 is: P1 = 100 – q1
The inverse demand curve in market 2 is: P2 = 200 – q2
Total costs are: TC = 20Q
The firm is able to discriminate between the two markets.
a) What quantities are sold in the two markets?
b) What price is charged in each market?
c) What is the profit of the firm?
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