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A Chinese steel producer has identified two markets. The first has a demand of q = 56 - p, the second of q = 24 - p. The cost function is C = 10+q². a) What is the profit maximizing price and output for the monopolist? You can assume that market segmentation is feasible. b)* Suppose now the monopolist's cost increases to C = 10 + 2q². How is your answer in a) affected? Discuss what happened

A Chinese steel producer has identified two markets. The first has a demand of q = 56 - p, the second of q = 24 - p. The cost function is C = 10+q². a) What is the profit maximizing price and output for the monopolist? You can assume that market segmentation is feasible. b)* Suppose now the monopolist's cost increases to C = 10 + 2q². How is your answer in a) affected? Discuss what happened

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1. A Chinese steel producer has identified two markets. The first has a demand of q = 56 - p, the second of q = 24 - p. The cost function is C = 10+q². a) What is the profit maximizing price and output for the monopolist? You can assume that market segmentation is feasible. b)* Suppose now the monopolist's cost increases to C = 10 + 2q². How is your answer in a) affected? Discuss what happened

1. A Chinese steel producer has identified two markets. The first has a demand of q = 56-p, the second of q=24 - p. The cost function is C= 10+q2. a) What is the profit maximizing price and output for the monopolist? You can assume that market segmentation is feasible. b)* Suppose now the monopolist's cost increases to C = 10+9². How is your answer in a) affected? Discuss what happened.
Transcribed Image Text:1. A Chinese steel producer has identified two markets. The first has a demand of q = 56-p, the second of q=24 - p. The cost function is C= 10+q2. a) What is the profit maximizing price and output for the monopolist? You can assume that market segmentation is feasible. b)* Suppose now the monopolist's cost increases to C = 10+9². How is your answer in a) affected? Discuss what happened.
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