Monopolist sells in two geographically divided markets

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A monopolist sells in two geographically divided markets, the East and the West. Marginal cost is constant at $50 in both markets (marginal cost is also equal to average total cost). The inverse demand curve in each market is as follows: Pe=450-.5Qe Pw=700-Qw a) Find the profit-maximizing quantity, price, and profit in each market. b) In which market is demand more elastic? c) Show what will happen to the monopolist’s profit if it is to charge the same price in both markets (that is, profit if the monopolist treats the markets as if they are the same).

Reference no: EM131107513

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