Suppose that a monopolist sells a product to men and women. If the firm sets a single price, the monopolist would produce 100000 units and sell them at a price of $5.00 per unit. Suppose that at that price, the price elasticity of demand for men is -0.75 and the price elasticity of demand for women is -2.50. The monopolist is considering whether he should set discriminatory prices and asks for you're advice. Part 1 Suppose the monopolist is thinking about charging men a %10 higher price. If the monopolist does so, the quantity demanded by men would fall by _______% (give answer to one decimal) Part 2. Suppose the monopolist is thinking about charging women a 10% higher price. If the monopolist does so, the quantity demanded by women would fall by ________% (give answer to one decimal)
Suppose that a monopolist sells a product to men and women. If the firm sets a single price, the monopolist would produce 100000 units and sell them at a price of $5.00 per unit. Suppose that at that price, the price elasticity of demand for men is -0.75 and the price elasticity of demand for women is -2.50. The monopolist is considering whether he should set discriminatory prices and asks for you're advice. Part 1 Suppose the monopolist is thinking about charging men a %10 higher price. If the monopolist does so, the quantity demanded by men would fall by _______% (give answer to one decimal) Part 2. Suppose the monopolist is thinking about charging women a 10% higher price. If the monopolist does so, the quantity demanded by women would fall by ________% (give answer to one decimal)
Chapter8: Monopoly
Section: Chapter Questions
Problem 6SQP
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Suppose that a monopolist sells a product to men and women. If the firm sets a single price , the monopolist would produce 100000 units and sell them at a price of $5.00 per unit. Suppose that at that price, the price elasticity of demand for men is -0.75 and the price elasticity of demand for women is -2.50. The monopolist is considering whether he should set discriminatory prices and asks for you're advice.
Part 1
Suppose the monopolist is thinking about charging men a %10 higher price. If the monopolist does so, the quantity demanded by men would fall by _______% (give answer to one decimal)
Part 2.
Suppose the monopolist is thinking about charging women a 10% higher price. If the monopolist does so, the quantity demanded by women would fall by ________% (give answer to one decimal)
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