A monopolistic firm operates in the U.S. No trade is
possible between the NY market and the LA market. The firm has calculated the
demand functions for each market as follows:
NY Market p = 150 – Q
LA Market p = 50 – Q
The company estimates its total cost function to be: TC = 40Q.
Calculate the following:
a. quantity, total revenue and profit when the company maximizes its profit and charges the same price in both markets.
b. quantity, total revenue and profit when the company charges different prices in each market and maximizes its total profit.
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