Johnson, Inc., a monopolist, produces a chemical at a constant marginal cost of $12. The chemical is sold in market A and market B where the demand functions are qA=120-pA, and qB=80-pB, respectively. a) If resale of the chemical between markets A and B is not feasible and price discrimination is allowed, compute the prices, the quantities sold, and Johnson’s Inc. profits at the industry equilibrium
Johnson, Inc., a monopolist, produces a chemical at a constant marginal cost of $12. The chemical is sold in market A and market B where the demand functions are qA=120-pA, and qB=80-pB, respectively. a) If resale of the chemical between markets A and B is not feasible and price discrimination is allowed, compute the prices, the quantities sold, and Johnson’s Inc. profits at the industry equilibrium
Managerial Economics: A Problem Solving Approach
5th Edition
ISBN:9781337106665
Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Publisher:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Chapter14: Indirect Price Discrimination
Section: Chapter Questions
Problem 3MC
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Johnson, Inc., a monopolist, produces a chemical at a constant marginal cost of $12. The chemical is sold in market A and market B where the demand functions are qA=120-pA, and qB=80-pB, respectively.
a) If resale of the chemical between markets A and B is not feasible and
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