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    profit maximization of a monopolist

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    A monopolist sells to two consumer groups, wives and mothers.

    Demand for wives: Q = 500 -1/2 P

    Demand for mothers: Q = 750 -2P

    MC = 20

    Please find the profit-maximizing price/quantity combination in each market if the groups can be separated. Please show calculations. Thank you.

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    Solution Preview

    For profit maximization the price will be set at MC=MR in each market segment as we can separate the two markets.
    Wives ...

    Solution Summary

    This solution discusses profit maximization.