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cost to providing Q units of groceries is C(Q) = 10Q. Suppose that its demand in New York is QN(P) = 120 - P and
cost to providing Q units of groceries is C(Q) = 10Q. Suppose that its demand in New York is QN(P) = 120 - P and demand in Rhode Island is QR(P) = 180 - 2P. TRADER JOE'S LITTLETRADER JOE'S Figure 1: The long lines to get into Trader Joe's in New York every single day...3.8. 3.9. 3.10. 3.11. What happens to consumer surplus for customers in New York (does it increase or decrease as a result of third degree price discrimination)? Hint: You don't need to do any calculations. What happens to consumer surplus for customers in Rhode Island (does it increase or decrease as a result of third degree price discrimination)? Hint: You don't need to do any calculations. What is the new deadweight loss? Is it better for society at large for Trader Joe's to set local or national prices (given these particular demand functions)? Hint: Calculate the deadweight loss associated with Rhode Island and New York separately and then add them together, and compare your answer to 3.5. Trader Joe's in New York typically features long lines to get into the store and more long lines to pay once inside, see Figure 1 (this is not the case in Rhode island). How might this alter your answer to question 3.107 Hint: is the price of groceries at Trader Joe's in New York, equal to the cost to a consumer of buying those groceries
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