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A producer has the possibility of discriminating between the domestic and foreign market for a product where the demands respectively are: Q = 30
A producer has the possibility of discriminating between the domestic and foreign market for a product where the demands respectively are: Q = 30 -0.25P1 Q = 26 -0.2P2 Total cost 100+20Q where Q= Q+Q a) What price will the producer charge in order to maximize profits with discrimination between markets. b) What is the maximum profit. Round all intermediate and final answers to the nearest cent, 2 d.p. Market 1 Q1=30-0.25P1 1. P= TR1= Q1- 2. MR1 3. MC= Q1 Market 2 Q2=26-0.2P2 P2= Q TR= Q2- Q MR2 Q MC= Q2 Set MR2=MC and solve for Q2 4. Set MR1=MC and solve for Q1 Q2= Q1= 5. P=$ P=$ 6. TR= $ TR= $ 7. TC=$ SAME Q=Q1+Q2= SAME 8. Combined TR= $ TP=$
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