Question
A producer has the possibility of discriminating between the domestic and foreign markets for a product where the demands, respectively, are Q1 = 21 -
A producer has the possibility of discriminating between the domestic and foreign markets for a product where the demands, respectively, are
Q1 = 21 - 0.1P1
Q2 = 50 - 0.4P2
Total cost = 2000 + 10Qwhere Q = Q1 + Q2.
What price will the producer charge in order to maximize profits(a) With price discrimination between markets?(9 points) (b) Without price discrimination?(10 points) (c) Compare the profit differential between discrimination and nondiscrimination.
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Microeconomics
Authors: Austan Goolsbee, Steven Levitt, Chad Syverson
2nd edition
1464187029, 978-1464189104, 1464189102, 978-0716759751, 716759756, 978-1464187025
