Suppose that a price discriminating monopolist has segregated its market into two groups of buyers shown in the table below.
Instructions:
Enter only whole numbers. If you are entering a negative number, be sure to include a negative sign (-) in front of that number.
a) Calculate the missing total-revenue and marginal-revenue amounts for Group 1.
|
Group 1 |
Group 2 |
|||||||
|
Price |
Quantity Demanded |
Total |
Marginal |
Price |
Quantity Demanded |
Total |
Marginal |
|
|
$115 |
0 |
$0 |
– |
– |
– |
– |
||
|
100 |
1 |
____ |
$____ |
– |
– |
– |
– |
|
|
83 |
2 |
____ |
____ |
– |
– |
– |
– |
|
|
71 |
3 |
____ |
____ |
$71 |
0 |
$0 |
– |
|
|
63 |
4 |
____ |
____ |
63 |
1 |
63 |
$63 |
|
|
55 |
5 |
____ |
____ |
55 |
2 |
110 |
47 |
|
|
48 |
6 |
____ |
____ |
48 |
3 |
144 |
34 |
|
|
42 |
7 |
____ |
____ |
42 |
4 |
168 |
24 |
|
|
37 |
8 |
____ |
____ |
37 |
5 |
185 |
17 |
|
|
33 |
9 |
____ |
____ |
33 |
6 |
198 |
13 |
|
|
29 |
10 |
____ |
____ |
29 |
7 |
203 |
5 |
|
Total Revenue: $
Marginal Revenue: $
b) Assume that MC is $13 in both markets and MC = ATC at all output levels. What price will the firm charge in each market?
Group 1:
units at a price of $
Group 2:
units at a price of $
c) Based solely on these two prices, which group has the higher price elasticity of demand? ( Group 1 or Group 2 )
d) What will be the monopolist’s total economic profit? $
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