Le Jouet is a French firm, and it is the only seller of toy trains in France and Russia. Suppose that when the price of toy trains increases, Russian children more readily replace them with toy airplanes than French children. Thus, the demand for toy trains in Russia is more elastic than in France. The following graphs show the demand curves for toy trains in France (DP) and Russia (DR) and marginal revenue curves in France (MRP) and Russia ( MRR). Le Jouet's marginal cost of production (MC), depicted as the grey horizontal line in both graphs, is $12, and the resale of toy trains from Russia to France is prohibited. Assume there are no fixed costs in production, so marginal cost equals average total cost (ATC). PRICE (Dollars per toy train) 40 36 32 28 24 20 16 12 " 4 0 0 2 France MC=ATC MR DF 4 6 8 10 12 14 16 18 20 QUANTITY (Millions of toy trains) (?) PRICE (Dollars per toy train) 40 36 32 28 24 20 16 12 4 Russia MC=ATC MR DR 0 0 2 4 68 10 12 14 16 18 20 QUANTITY (Millions of toy trains) Suppose that as a nondiscriminating seller, Le Jouet charges the same price of $20 per toy train in each of the two markets. (?) In the following table, complete the third column by determining the quantity sold in each country at a price of $20 per toy train. Next, complete the fourth column by calculating the total profit and the profit from each country under a single price. Single Price Price Discrimination Price (Dollars per toy Country train) Quantity Sold (Millions of toy trains) Profit (Millions of dollars) Price (Dollars per toy train) Quantity Sold (Millions of toy trains) Profit (Millions of dollars) France 20 Russia 20 Total N/A N/A N/A N/A Suppose that as a profit-maximizing firm, Le Jouet decides to price discriminate by charging a different price in each market, while its marginal cost of production remains $12 per toy. Complete the last three columns in the previous table by determining the profit-maximizing price, the quantity sold at that price, the profit in each country, and total profit if Le Jouet price discriminates. Le Jouet charges a lower price in the market with a relatively elastic demand curve. True or False: Under price discrimination, Le Jouet is dumping toy trains into the Russian market. True False