Question 1: A monopolist has the cost function C(Q) = 9Q + 0.5^Q2 and faces two types of consumers, A and B, with the following demand curves for its product:
PA = 120 – 2*QA
PB = 204 – 5*QB
(a) What price will the monopolist charge under uniform pricing?
(b) What prices will the monopolist charge if it can price discriminate?
(c) How much higher is the monopolist’s profit in (b) than in (a)?
