Goods often sell for different prices in different countries. Suppose the inverse demand curves in two countries

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Goods often sell for different prices in different countries. Suppose the inverse demand curves in two countries are \(p_{1}=40-3 Q_{1}\) and \(p_{2}=90-2 Q_{2}\), and a monopoly produces at constant marginal cost, \(M C=10\). What is the profit maximizing price and quantity in each country? Will the monopolist necessarily be able to sell its output at those prices if shipping costs between the two countries are low? Explain.

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Microeconomics

ISBN: 9781292215624

8th Global Edition

Authors: Jeffrey Perloff

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