Multimarket Monopoly, A monopolist operates in two separated markets. The inverse demand

+44 141 628 6080
[email protected]

--%>

Multimarket Monopoly

A monopolist operates in two separated markets. The inverse demand functions ofthose markets are given by and where arethe quantities supplied to these markets, respectively. The total cost function facedby the monopolist is . In addition, there is a sales cost of £c perunit sold in market 1. There is no such additional sales cost in market 2.a. Solve for the optimal quantities in terms of c. What is theneeded condition for the firm to serve both the markets in equilibrium?b. What effects does an increase in c have on the (i) profits in each marketand (ii) overall consumer surplus? Provide both mathematical and intuitiveexplanations of your result.c. Suppose the quantities are fixed at the levels derived at (b), but the firm isnow allowed to charge two part tariffs in both markets. What would be theoptimal unit price (not the fixed fee) in each market?

View Complete Question

Related Questions in Microeconomics

Q : Relatively inelastic supply curve in

Marginal revenue is below average revenue as [TR/Q] for a firm along with market power since: (w) the demand curve this faces is negatively sloped. (x) its supply curve is relatively inelastic. (y) marginal cost is be

Q : Rate of Return onto Investment When

When Henrietta Homeowner invests $100 to replace her old mechanical thermostat along with a new computerized “smart” thermostat, in that case her gas and electric bills will be decreased by $100 yearly all times. The rate of return onto this invest

Q : Lower costs of large oligopolists This

This is possible that consumers could pay a lower price within an oligopoly market than a competitive market since large oligopolists: (w) can price below cost. (x) often give quantity discounts to loyal customers. (y

Q : Can the value of APS be negative Can

Can the value of APS be negative:Yes, the value of APS is negative; when there are dissavings.

Q : Changes in Household Demand The changes

The changes in a household’s tastes most directly influence the families: (1) Number of members. (2) Demands for goods. (3) Total wealth. (4) Income constraint. Can someone please help me in finding out the a

Q : Voluntary Poverty and Involuntary

Families or individuals experience involuntary poverty while they: (w) cannot rise above the poverty line since they fail to qualify for transfer payments. (x) are laid off from work throughout a widespread recession or depression. (y) lack adequate r

Q : When is not total annual revenue

As per this demonstrated figure in below, unless something changes the total annual revenue of Robot Butlers, Inc. Can’t exceed: (1) $10,000. (2) $20,000. (3) $100 million. (4) $200 million. (5) $400 million.

Q : Perfectly competitive monopolized

When a perfectly competitive industry is monopolized along with no effect on costs in that case the result will be: (w) higher prices and greater output. (x) lower prices and greater output. (y) higher prices and lower output. (z) lower prices and low

Q : Analytic Time in economic theory of

In economic theory of production: (1) Average fixed costs equally drop as the capacity of firm rises. (2) Technology can be varied wholly. (3) The choices available to firm raise as longer periods are considered. (4) Firms which do not cover all the h

Q : Market structure of monopoly A monopoly

A monopoly is a type of market structure in that one: (w) seller produces whole industry’s output. (x) giant firm is a price taker. (y) barrier to entry exists. (z) giant firm is the single buyer of resources.

Discover Q & A

Leading Solution Library

Avail More Than 1450706 Solved problems, classrooms assignments, textbook's solutions, for quick Downloads

No hassle, Instant Access

Start Discovering

18,76,764

1959990
Asked

3,689

Active Tutors

1450706

Questions
Answered

Start Excelling in your courses, Ask an Expert and get answers for your homework and assignments!!

Submit Assignment