Suppose a firm has a monopoly over the sale of smartwatches…
Questions
Suppоse а firm hаs а mоnоpoly over the sale of smartwatches in the U.S. The inverse demand for smartwatches in Florida is given by P1(q1) = 200 - q1, and the inverse demand in New York is given by P2(q2) = 100 – 3q2, where q1 and q2 are the total output of smartwatches sold in Florida and New York, respectively. The demand for smartwatches in each market is observable to the monopolist. The firm has a constant marginal cost of $4 and zero fixed costs. Assume that the firm can charge different prices in each market. What is the profit-maximizing quantity sold to consumers in the New York market?