Citadelle, the Qubec maple syrup producer, sells its syrup in Canada and in the United States. The

demand in Canada is given byP= 37 -Q_CA, where P is the price ($ per litre) andQ_CAis the quantity

demanded (thousands of litres per year). The demand in the United States is given byP= 42 -Q_US,

wherePis the price ($ per litre) andQ_USis the quantity demanded (thousands of litres per year). The

cost function isC= 200,000 + 10Q, whereCis the total cost (in $ per year) andQis the total quantity

produced (litres per year)

SupposeCitadellecan practice the third-degree (linear) price discrimination.

1.Find the profit-maximizing quantity in Canada (in thousands of litres per year) and profit-maximizing price in Canada (in $ per litre).

2.Find the profit-maximizing quantity in the United States (in thousands of litres per year) and profit-maximizing price in the United States (in $ per litre).

3.Calculate the combined (Canada + US) consumer surplus (in thousands of $ per year).

4.Calculate the profits (in thousands of $ per year).

5.Is the third-degree price discrimination more efficient than uniform pricing? How do you know?