A monopolist provides the same service in two separate markets A and B given the nature of the service, resale is not feasible. The marginal cost of delivering the service is constant and equal in both markets and price demand elasticity is twice higher in A than in B. Will price be higher in market A or in market B? Reinforce your explanation with a graph.

A monopolist provides the same service in two separate markets A and B given the nature of the service, resale is not feasible. The marginal cost of delivering the service is constant and equal in both markets and price demand elasticity is twice higher in A than in B. Will price be higher in market A or in market B? Reinforce your explanation with a graph.

Microeconomics

13th Edition

ISBN:9781337617406

Author:Roger A. Arnold

Publisher:Roger A. Arnold

Chapter10: Monopoly

Section: Chapter Questions

Problem 3QP

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