Lexmark charges lower prices for its printer cartridges in some foreign countries than it charges in the
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Lexmark charges lower prices for its printer cartridges in some foreign countries than it charges in the United States. An article in the Wall Street Journal explained how a company in West Virginia bought Lexmark printer cartridges from retailers in foreign countries and resold the cartridges for higher prices in the United States.
a. What must Lexmark be assuming about the price elasticity of demand for printer cartridges in the United States relative to the price elasticity of demand for printer cartridges in these foreign countries?
b. Is Lexmark likely to be able to continue to price discriminating in this way? Briefly explain.
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