2. You have a monopoly in the sale of medicinal marijuana at Tempe High School, where the demand function is known to be p1 = 30 - q1. You also have a monopoly at Marcos DeNiza, where the demand is p2 = 24 - q2. For each of the following conditions, graph the solutions for p’s and q’s in both markets.
b. MC = 3 + q, with no capacity constraint. Carefully explain why solutions are NOT found
at the intersections of MC and the individual MR curves
I know this:
Set MR = MC
27-q = 3+q
q=12
MR = 15
q1=7.5
q2=4.5
MR2=24 - 15 - 2q
q=9/2
=4.5
P1= 30 - q1
MR1= 30 - 2q1
MR = 15
q = 12
But how do I carefully explain why solutions are NOT found at the intersections of MC and the individual MR curves?
b. MC = 3 + q, with no capacity constraint. Carefully explain why solutions are NOT found
at the intersections of MC and the individual MR curves
I know this:
Set MR = MC
27-q = 3+q
q=12
MR = 15
q1=7.5
q2=4.5
MR2=24 - 15 - 2q
q=9/2
=4.5
P1= 30 - q1
MR1= 30 - 2q1
MR = 15
q = 12
But how do I carefully explain why solutions are NOT found at the intersections of MC and the individual MR curves?