Madison H. Suppose a monopolist produces in a market with two distinct segments: market 1, which is denoted as M1 on the graph, and market 2, denoted as M2. The firm's marginal and average costs are $20. a. What is the firm's profit in market 1? b. What is the firm's profit in market 2? c. In which market is demand more elastic?
1 Expert Answer
Step 1: Find profit maximizing quantity and price for each Step 2: Calculate total revenue Step 3: Calculate total cost Step 4: Find profit by calculating TR-TC Problem text: Suppose a monopolist produces in a market with two distinct segments: market 1, which is denoted as M1 on the graph, and market 2, denoted as M2. The firm's marginal and average costs are $20.
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