What should the firm do to maximize profits? - ProProfs Discuss
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What should the firm do to maximize profits?

A third-degree price discriminating monopolist can sell its output either in the local market or on an internet auction site (or both). Having sold all of its output it discovers that the marginal revenue in the local market is $20 while its marginal revenue on the internet auction site is $30.
1. Sell less in both markets until marginal revenue is zero.
2. Have sold more output in the local market and less at the internet auction site.
3. Do nothing until it acquires more information on costs.
4. Have sold less output in the local market and more on the internet auction site
5. Sell more in both markets until marginal cost is zero.

Asked by Twright, Last updated: Mar 23, 2024

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1 Answer

John Smith

John Smith

John Smith
John Smith

Answered Apr 25, 2017

Sell more in both markets until marginal cost is zero.
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