A firm has a monopoly with one of its products. The demand curve for the product is different in three different markets. The firm would like to charge a different price in each of the markets, i.e., practice third degree price discrimination. The market demand curves are straight lines given by:Market 1: Q = 9 1/20PMarket 2: Q = 10 1/10PMarket 3: Q = 16 1/5PThe firm must make more than 10 units and its total cost function is given by:TC = 5/2Q^2 50Q + 490, Q>10a. Determine the quantity that the firm should produce to maximize profit.b. Determine the quantity and price for each of the markets.c. Compute the profit in each market and the total profit for the firm.d. What would be the total profit for the firm if it did not practice third degree price discrimination? How much of the consumer surplus was the firm able to recuperate for its self?Show all calculations.
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