Question #71229

Suppose a monopoly can produce any level of output it wishes at a constant marginal and average cost of $5 per unit. Assume the monopoly sells its good in two separate markets. The demand curve of the first market is q1= 55-p1 and the demand curve of the second market is q2= 70-2p2

Expert's answer

P1=55-q1

TR1=55q1-q1*q1

MR1=55-2*q1

55-2q1=5

Q1=25

P1=55-25=30

P2=35-0.5q2

TR2=35q2-0.5q2*q2

MR2=35-q2

5=35-q2

Q2=30

P2=35-0.5*30=20

## Comments

Assignment Expert28.11.18, 20:01Dear Joshua, you are right. Thank you for your comment.

Joshua28.11.18, 19:27I think you messed up the final equation because you forgot to divide the equation by 2 when you solved for P2. P2=35 -.5Q2 = 35 - .5(30) = 20

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