A monopolist has a constant marginal cost of 2 per unit and no fixed costs. He faces two separate markets in the United States and in the UK. The goods sold in one market are never resold in the other. He sets one price P₁ for the US market and another price P₂ for the UK market (both measured in ). The demand in the United States is given by Q₁=7,000-700P₁ and the demand in the UK is given by Q₂=1,200-200P₂.

1. Calculate the profit maximising output produced and price charged in each country by the price-discriminating monopolist and comment in which country the price charged is higher and by how much.