BUS 207 Lecture Notes - Economic Equilibrium, Marginal Revenue, Price Discrimination

• School: Simon Fraser University
• Department: Business Administration
• Course: BUS 207
• Professor: Allan Matadeen

Document Summary

A monopolist produces a single homogeneous good, which she sells in two distinct markets. Tc = 1/3 q3 - 7. 5q2 + 370q + 100. The demand curves in the two markets are given by: q1 = 80 - 0. 2p1 and q2= ap2. The monopolist achieves a profit-maximizing equilibrium at which her total output (q = q1 + q2) is. 10 and she charges a price of in market 1. (a) (b) (c) (d) Consolidated sugar company sells granulated sugar to both retail grocery chains and commercial users (e. g. , bakeries, candy makers, etc. ). The demand function for each of these markets is: Retail grocery chains: p1 = 90 - 4q1. Commercial users: p2 = 50 - 2q2 where p1 and p2 are the prices charged and q1 and q2 are the quantities sold in the respective markets. Consolidated"s total cost function (which includes a normal return to the owners) for granulated sugar is.