A monopolist sells in n. sub-markets with demand 11: = 1 trip where bi > 0. Assume that marginal cost is U. (a) What price will the company charge if it is not possible to discriminate? Show that the optimal price satises 5(p'\") = 1 where E is the demand elasticity corresponding to q = 2;] qr. (b) What are the optimal prices when the rm can discriminate? Show that consumers in submarkets with elasticities lower than the average are harmed by, and those in markets with elasticities higher than the average benet from discrimination. (c) Suppose now that there are only two sub-markets, n = 2, with in > b2. Assume further that perfectly competitive resellers can move goods from one market to the other at a unit cost 1*, so that the price difference between markets may never exceed 1'. What are the prices in the two markets if r is sufficiently low so that it is binding? How do prices change with 1"? Comment on what happens when r > 0. (d) Derive the threshold on r, denoted by f, such that for r :> \"F the presence of resellers does not constrain price discrimination by the rm. How does a" depend on In and b2