1. The following shows the demands andmarginal revenue in two markets (D1 and MR1, and D2 and MR2) for a price discriminating firm along with total demand, DT, marginal revenue, MRT, and marginal cost MC.

As with the PPT slides, you can view the data generating these lines; for reference,

D1 = 300 - 0.1Q

D2 = 450 - 0.1Q

MRT = 375 - 0.1Q

DT = 375 - 0.05Q

MC = 0.00017Q^2 - 0.35Q + 291.875

1. Compare the demand conditions in each market; i.e. how do the two markets differ in their demand for the firm's product?
   1. Market 1 has less demand (more elastic) than Market 2 (less elastic)

b. How much total output should the firm produce (for both markets combined)? How should that output be allocated between markets 1 and 2?

c. What price should the firm charge in each market?