The following table indicates the prices various buyers are willing to pay for a Miata sports car:
Buyer A Maximum price $50,000
Buyer B Maximum price $40,000
Buyer C Maximum price $30,000
Buyer D Maximum price $20,000
Buyer E Maximum price $10,000
The cost of producing the cars includes $50,000 of fixed costs and a constant marginal cost of $10,000. With a Quantity between 0 and 6 cars per period.
a) graph the demand, marginal revenue, and marginal cost curves.
b) What is the profit-maximizing rate of output and price for the monopolist? How much profit does the monopolist make?
c) If the monopolist can price-discriminate, how many cars will he sell?
d) How much profit will he make?