Suppose that a price discriminating monopolist has

Suppose that a price discriminating monopolist has segregated its market into two groups of buyers shown in the table below.

Instructions:

Enter only whole numbers. If you are entering a negative number, be sure to include a negative sign (-) in front of that number.

a) Calculate the missing total-revenue and marginal-revenue amounts for Group 1.

Group 1

Group 2

Price

Quantity Demanded

Total
Revenue

Marginal
Revenue

Price

Quantity Demanded

Total
Revenue

Marginal
Revenue

$115

0

$0

100

1

____

$____

83

2

____

____

71

3

____

____

$71

0

$0

63

4

____

____

63

1

63

$63

55

5

____

____

55

2

110

47

48

6

____

____

48

3

144

34

42

7

____

____

42

4

168

24

37

8

____

____

37

5

185

17

33

9

____

____

33

6

198

13

29

10

____

____

29

7

203

5

Total Revenue: $

Marginal Revenue: $

b) Assume that MC is $13 in both markets and MC = ATC at all output levels. What price will the firm charge in each market?

Group 1:

units at a price of $

Group 2:

units at a price of $

c) Based solely on these two prices, which group has the higher price elasticity of demand? ( Group 1 or Group 2 )

d) What will be the monopolist’s total economic profit? $

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