12.22. A seller produces output with a constant marginal cost MC ! 2. Suppose there is one group of consumers with the demand curve P1 ! 16 " Q1, and another with the demand curve P2 ! 10 " (1/2)Q2.

a) If the seller can discriminate between the two markets, what prices would she charge to each group of consumers? (You may want to exploit the monopoly midpoint rule from Learning-By-Doing Exercise 11.5.)

b) If the seller cannot discriminate, but instead must charge the same price P1 ! P2 ! P to each consumer group, what will be her profit-maximizing price?

c) Which, if any, consumer group benefits from price discrimination?

d) If instead P1 ! 10 " Q1, does either group benefit from price discrimination?