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Market 2 5 Total market (b) Arm manufactures a product that is sold on two different markets (A and B) that have the following demand
Market 2 5 Total market (b) Arm manufactures a product that is sold on two different markets (A and B) that have the following demand functions: QA=400PA QB=120-PB The firm has the following total cost function: TC=1000 + ZDQ = 1000 + 20(QA +QB) 1. lfthe firm is engaging in price discrimination, the rm should produce units ofA and charge 5 for product A, and produce units of B and charge :5 for product B. 2. With price discrimination, the rm can generate a total revenue $ in productA market and generate a total revnue $ in product B market. Thus, the Total revenue from both A and B market will be 1; 3. The total cost for the rm will be If: and prot earned from both market will be S
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