Netflix can be thought of as a firm that uses 3rd degree price discrimination.

In Europe, the demand has been calculated to be PE = 24 - QE while in the USA it's been calculated as PU = 36 - 4QU.

Marginal cost is stable at MC = 4 in both Europe and the USA.

a) What will be the prices and quantities in both markets assuming Netflix can price discriminate by geography? What will profits be?

b) What will price and quantity be if Netflix cannot price discriminate? What will profits be? Is this higher or lower than if Netflix can price discriminate? (Hint: You will need to aggregate demand curves.)