(Figure: Monopolist) Refer to the figure. Based on the demandcurves for a monopolist's product in two different markets-Market A and Market B-through the process of pricediscrimination, how much profit is the monopolist making inMarket A?

Question

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To maximize profits, a monopolist engages in price discrimination by charging different prices in different markets based on the elasticity of demand in each market. In Market A, the monopolist charges a price of $70 and sells 15 units, resulting in a total revenue of $1050. The monopolist's marginal cost is $20, so the total cost of producing 15 units is $300. Therefore, the monopolist's profit in Market A is $750. In Market B, the monopolist charges a price of $50 and sells 30 units, resulting in a total revenue of $1500. The monopolist's marginal cost is still $20, so the total cost of producing 30 units is $600. Therefore, the monopolist's profit in Market B is $900. Thus, the monopolist is making a profit of $450 in Market A (option B).

(Figure: Monopolist) Refer to the Figure