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Mahe, a monopolist, sells his autobiography in two markets.

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4. (a) Mahe, a monopolist, sells his autobiography in two markets. The demand curve for his autobiography is given by p1 = 141 - 3x1 in the first market and p2 = 115 - 2X2 in the second market, where xi is the quantity sold in market i and pi is the price charged in market i. He has a constant marginal cost of production, c = 3, and no fixed costs. He can charge different prices in the two markets. What is the profit-maximizing combination of quantities for Mahe?

 

Paper#28005 | Written in 18-Jul-2015

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