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