You are the manager of a monopoly that sells a product to two groups of consumers in different parts of the country. Ana

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You Are The Manager Of A Monopoly That Sells A Product To Two Groups Of Consumers In Different Parts Of The Country Ana 1 (172.59 KiB) Viewed 27 times

You are the manager of a monopoly that sells a product to two groups of consumers in different parts of the country. Analysts at your firm have determined that group 1's elasticity of demand is -5, while group 2's is −3. Your marginal cost of producing the product is $40. Instructions: Enter your responses rounded to two decimal places. a. Determine your optimal markups and prices under third-degree price discrimination. Markup for group 1: Price for group 1: $ Markup for group 2: Price for group 2: $ b. Which of the following are necessary conditions for third- degree price discrimination to enhance profits. Instructions: In order to receive full credit, you must make a selection for each option. For correct answer(s), click the box once to place a check mark. For incorrect answer(s), click twice to empty the box. ? At least one group has elasticity of demand greater than 1 in absolute value. ? There are two different groups with different (and identifiable) elasticities of demand. ? At least one group has elasticity of demand less than one in absolute value. ? We are able to prevent resale between the groups.