Marginal cost is constant at $50 in both east and west markets. Demand and Marginal revenue are the same:
a. What is the profit maximum price and quantity for each market
b. Which market is more elastic
Profit maximization rule MR = MC
first we look at market e
MR = 450-Qe = 50 = MC, Qe = 400.
Qe = 900-2Pe = 400, so Pe = 250
Now we look at ...
Monopolist of marginal costs are examined for east and west markets.