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A monopolist sells in two states. The demand function in state 1 and 2 respectively is Q1(p1)=50 – p1 and Q2(p2)=90-1.5p2. The monopolist produces at a constant marginal cost of 10. If the monopolist is able to price discriminate and charge different prices in the two markets, she would choose to charge p1*=X and p2*= Y.

values for X and Y?

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Answer

The answer and procedures of the exercise are attached in the following archives.

Explanation  

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