Please show the steps with the correct answer for me to follow. Thanks for the help!
Pricing and Advertising
2. A monopoly sells in two countries, and resale between the countries is impossible. The demand curves in the two countries are P1=100-Q1 and P2=120-2Q2. The monopolyâs marginal cost is m=30. Solve for the equilibrium price in each country.
3. Suppose that the nonlinear price discriminating monopoly in panel a of figure 12.4 can set three prices, depending on the quantity a consumer purchases. The firmâs profit is
Î =P1Q1+P2(Q2-Q1)+P3(Q3-Q2)-mQ3
Where P1 is the high price charged on the first Q1 units (first block), p2 is a lower price charged on the next Q2-Q1 units, p3 is the lowest price charged on the Q3-Q2 remaining units, Q3 is the total number of units actually purchased, and m=$30 is the firmâs constant marginal and average cost. Use calculus to determine the profit maximizing p1,p2, and p3.
4. The demand a monopoly faces is p=100-Q+A^0.5
Where Q is its quantity, p is its price, and A is its level of advertising. Its marginal cost of production is 10, and its cost of a unit of advertising is 1. What is the firmâs profit equation? Solve for the firmâs profit maximizing price, quantity, and level of advertising.
Please show the steps with the correct answer for me to follow. Thanks for the help!
Pricing and Advertising
2. A monopoly sells in two countries, and resale between the countries is impossible. The demand curves in the two countries are P1=100-Q1 and P2=120-2Q2. The monopolyâs marginal cost is m=30. Solve for the equilibrium price in each country.
3. Suppose that the nonlinear price discriminating monopoly in panel a of figure 12.4 can set three prices, depending on the quantity a consumer purchases. The firmâs profit is
Î =P1Q1+P2(Q2-Q1)+P3(Q3-Q2)-mQ3
Where P1 is the high price charged on the first Q1 units (first block), p2 is a lower price charged on the next Q2-Q1 units, p3 is the lowest price charged on the Q3-Q2 remaining units, Q3 is the total number of units actually purchased, and m=$30 is the firmâs constant marginal and average cost. Use calculus to determine the profit maximizing p1,p2, and p3.
4. The demand a monopoly faces is p=100-Q+A^0.5
Where Q is its quantity, p is its price, and A is its level of advertising. Its marginal cost of production is 10, and its cost of a unit of advertising is 1. What is the firmâs profit equation? Solve for the firmâs profit maximizing price, quantity, and level of advertising.
