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Suppose a market is characterized as having two different classes of buyers: Class One and Class Two. Furthermore suppose there is only one producer serving this market and this producer has fixed costs equal to $20 and Marginal Cost equal to 1 (MC = 1). The two classes of buyers are described by the following demand curves:
Class One: P = 10 - Q
Class Two: P = 20 - Q
For each of the questions below show your work and reasoning.
Suppose that the monopolist decides to produce the good and sell it for a single price.
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