Suppose a monopolist sells in two distinct markets the


Suppose a monopolist sells in two distinct markets. The demand for the first mar- ket is given by P1 = 240 − 2Q1 , where Q1 is the quantity demanded and P1 is the price paid by the first group. The demand for the second market is given by P2 = 120 − Q2, where Q2 is the quantity demanded and P2 is the price paid by the second group. The monopoly’s marginal cost is given by MC = 40. (a) How much does the monopoly supply in each market and what price does it charge? (b) Use your answers to part (a) to calculate the elasticity of demand for each market.

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Business Economics: Suppose a monopolist sells in two distinct markets the
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