A monopolist sells its good in the US and Canadian markets. The US inverse demand function is PUS = 24 โ QUS and the Canadian inverse demand function is PC = 20 โ 1 2 QC where both prices PUS and PC are measured in US dollars. The firmโs marginal cost of production is constant at MC = 4 in both countries. If the firm can prevent re-sales, what price will it charge in each market? (Hint: The monopolist determines its optimal price in each country separately because customers cannot re-sell the good.)
Answers: 2
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A monopolist sells its good in the US and Canadian markets. The US inverse demand function is PUS =...
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