A monopolist is deciding how to allocate output between two geographically separated markets
(East Coast and Midwest). Demand and marginal revenue for the two markets are:
P1 = 15 -Q1 ----> MR1 = 15 - 2Q1
P2 = 25 - 2Q2 ----> MR2 = 25 - 4Q2
The monopolists total cost is C = 5 - 3(Q1 - Q2 ). What are price, output, prots, marginal revenues, and deadweight loss if
(a) the monopolist can price discriminate?
(b) if the law prohibits charging deferent prices in the two regions?