Question
(a)MU Sdn. Bhd. sells its product in two markets i.e. Malaysia and Singapore. The elasticity of demand for the product in Malaysia is EM =
(a)MU Sdn. Bhd. sells its product in two markets i.e. Malaysia and Singapore. The elasticity of demand for the product in Malaysia is EM = 1.8, and in Singapore is ES = 1.4. The marginal cost of the product is constant at RM100. Assuming the condition for third-degree price discrimination holds and the company can charge two different prices to these two groups of consumers. Calculate the profit-maximizing price for each market. (5 marks)
1.MidV House discriminates the price between two groups of customers. Assume that the demand function n for Group A is P = 20,000 4Q and Group B is P = 16,000 3Q. The marginal cost is fixed at RM4,000. Calculate the profit-maximizing price, output and total profit earned by MidV House. (12 marks)
2.Why does the KTM Berhad offer discount on train tickets to students but not to business executives? Explain.(6 marks)
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