Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

A weapons producer sells guns to two countries that are at war with each other. The guns can be produced at a constant marginal cost

image text in transcribed
A weapons producer sells guns to two countries that are at war with each other. The guns can be produced at a constant marginal cost of $10. The demand for guns from the two countries can be represented as: QA = 100 - 2p QB = 80 - 4p A. Why is the weapons producer able to price discriminate? B. What price will it charge to each country? C. Assume the fixed cost is zero so the total cost is TC(Q)=10Q. What is the joint profit of the weapon producer

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Commercial Fishing On The Outer Banks

Authors: R Wayne Gray, Nancy Beach Gray

1st Edition

1439667055, 9781439667057

More Books

Students also viewed these Economics questions