A monopoly book publisher with a constant marginal cost (and average cost) of MC = 2 sells a novel in only two countries and faces a linear inverse demand curve of
p1=6−0.5q1
In Country 1 and
p2=9−q2
In Country 2. What price would a profit-maximizing monopoly change in each country with and without a ban against shipments between countries?
With a ban against shipments between countries, the monopoly would charge Country 1 a price of
P1 = $4.00
And Country 2 a price of
P2 = $5.50. (Enter your response rounded to two decimal places.)
With the ban, the monopoly's profit (x) is
x = S20.25
Without a ban against shipments between countries, the monopoly would charge both countries a price of p = S(-----)
What is the price that monopoly would charge both countries without a ban against shipment between countries?