A monopolist faces two consumer groups: old and young. The inverse demand of old clients for the output of the monopolist is Po=100-2Qo. The inverse demand of young clients for the output of the monopolist is Py=80=Qy. The marginal cost of supplying any type of client is MC=10. If the monopolist can price discriminate between the two groups (i.e., charge a different uniform price to each group), what price will old and young clients be charged?

Monopolist maximize profit by producing where marginal revenue is equal to marginal cost. The old and young clients will be charged $55 and $45 respectively.

Define marginal revenue?

The cash an organization receives for each extra sale is known as marginal revenue.
In other words, it calculates how much money a company would make from selling one more good.
For instance, a baker's marginal revenue is $2 if they sell an additional loaf of bread for $2.
Change in Revenue / Change in Quantity equals Marginal Revenue.
The profit made by a company or individual when one more unit is produced and sold is known as a marginal profit.
Marginal refers to the additional expense or profit made when producing the following unit.
In terms of economics, marginal refers to having slightly more or slightly less of something.
It speaks of the results of using or providing one more unit of a good or service.

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