Optimal mark-ups and prices under third-degree price

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Reference no: EM13801677

You are the manager of a monopoly that sells a product to two groups of consumers in different parts of the country. Group 1’s elasticity of demand is -5, while group 2’s is -3. Your marginal cost of producing the product is $40.

Determine your optimal mark-ups and prices under third-degree price discrimination.

Instruction: Round your answers to two decimal places.

Mark-up for group 1:

Price for group 1: $

Mark-up for group 2:

Price for group 2: $

Instruction: Round your answers to two decimal places.

Reference no: EM13801677

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