A monopolist is deciding how to allocate output between two geographically separated markets (East Coast and Midwest). Demand and marginal revenue for the two markets are:
P1 = 20 - 0, MR1 = 20 - 0
P2 = 25 - 20, MR2 = 25 - 40
The monopolist's total cost is C = 25 + 5(0 - 0).
What are the price, output, profits, marginal revenues, and deadweight loss if the monopolist can price discriminate? (Round all answers to two decimal places)
In market 1, the price is $12.50 and the quantity is 7.5.
In market 2, the price is $15 and the quantity is unknown.
The monopolist's profit is $101.25 and the deadweight loss is unknown.