A monopolist faces two consumers with individual demands q₁ (p) = 400-2p and 9₂ (p) when facing price p. Suppose it produces with the cost function of c(q) = 2,000 + 50q+ = 250-p A. If the monopoly sells with discriminating prices in two markets, find the prices in the two markets.
B. If the monopoly can exercise perfect price discrimination across the two markets as to charge every unit for different price, find its optimal output level.