1. Effective market separation e.g in terms of time, age, geographical location etc.
2. Absolute control over supply.
3. Different price elasticity of demand in different markets.
Wilfykil answered the question on February 7, 2019 at 05:49
- You have been hired as a consultant by a firm producing bread to advise on a pricing strategy that would
enable the firm to maximize profits....(Solved)
You have been hired as a consultant by a firm producing bread to advise on a pricing strategy that would
enable the firm to maximize profits. This firm is a monopolist which sells in two distinct markets, one of
which is completely sealed off from the other.
As part of the analysis, you establish that the total demand for the firm‟s output is given by the
following equation:
Q = 50 – 0.5P
and the demand for the firm‟s output in the two markets is given by the following equations:
Q1 = 32 – 0.4P1 and
Q2 = 18 – 0.1 P2
Where: Q = total output
P = Price
Q1 = Output sold in Market 1
Q2 = Output sold in Market 2
P1 = Price charged in Market 1
P2 = Price charged in Market 2
The cost of production is given by C = 50 + 40Q
Where C = total cost of producing bread.
How much profit would the firm earn if it sold the output at a single price, and if it discriminates?
Date posted: February 7, 2019. Answers (1)
- You have been hired as a consultant by a firm producing bread to advise on a pricing strategy that would
enable the firm to maximize profits....(Solved)
You have been hired as a consultant by a firm producing bread to advise on a pricing strategy that would
enable the firm to maximize profits. This firm is a monopolist which sells in two distinct markets, one of
which is completely sealed off from the other.
As part of the analysis, you establish that the total demand for the firm‟s output is given by the
following equation:
Q = 50 – 0.5P
and the demand for the firm‟s output in the two markets is given by the following equations:
Q1 = 32 – 0.4P1 and
Q2 = 18 – 0.1 P2
Where: Q = total output
P = Price
Q1 = Output sold in Market 1
Q2 = Output sold in Market 2
P1 = Price charged in Market 1
P2 = Price charged in Market 2
The cost of production is given by C = 50 + 40Q
Where C = total cost of producing bread.
What price must be charged in each market in order to maximize profits?
Date posted: February 7, 2019. Answers (1)
- You have been hired as a consultant by a firm producing bread to advise on a pricing strategy that would
enable the firm to maximize profits....(Solved)
You have been hired as a consultant by a firm producing bread to advise on a pricing strategy that would
enable the firm to maximize profits. This firm is a monopolist which sells in two distinct markets, one of
which is completely sealed off from the other.
As part of the analysis, you establish that the total demand for the firm‟s output is given by the
following equation:
Q = 50 – 0.5P
and the demand for the firm‟s output in the two markets is given by the following equations:
Q1 = 32 – 0.4P1 and
Q2 = 18 – 0.1 P2
Where: Q = total output
P = Price
Q1 = Output sold in Market 1
Q2 = Output sold in Market 2
P1 = Price charged in Market 1
P2 = Price charged in Market 2
The cost of production is given by C = 50 + 40Q
Where C = total cost of producing bread.
Determine the total output that the firm must produce in order to maximize profits.
Date posted: February 7, 2019. Answers (1)
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C = a + bYd
Where Yd = Y – T
And Y = Income
...(Solved)
Given a hypothetical consumption function of the form:
C = a + bYd
Where Yd = Y – T
And Y = Income
T = Taxes and that:
Government spending and investment are exogenously determined at G and I respectively: Determine Government Spending
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Determine the equilibrium quantity and price by graphical method(Solved)
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Determine the equilibrium quantity and price by graphical method
Date posted: February 6, 2019. Answers (1)
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400. If the Government?s expenditures were to increase by 50%...(Solved)
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400. If the Government‟s expenditures were to increase by 50% what would be the resultant change in National income.
Date posted: February 6, 2019. Answers (1)
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400. Formulate the consumption function.(Solved)
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