Price Discrimination. The United Parcel Service (UPS) primary business is the time-definite delivery of packages and documents worldwide. But in 2004, UPS entered the heavy freight business and now extended its service to include freight trucking transportation. UPS has two major customer groups -- Steel America Corporations (S) and Corn International Federation (C)-- that ship freight between Pittsburgh, PA, and Hammond, IN. UPS' total cost function and each customer group demand curves for freight services are as follows: Note: P MR. [Hint: MRs = MC and MRc = MC] Steel America Corn International Total Cost PS = 75 - 0.125Qs PC = 60 - 0.05QC TC = 1,000 + 48Q Qs = the quantity of steel shipped (measured in pounds) PS = the freight shipping price for Steel America (measured in $) QC = the quantity of corn shipped (measured in pounds) PC = the freight shipping price for Corn International (measured in $) 1. Calculate UPS' output, price, and profit under their price discrimination scheme. Round quantity to a whole number. Round prices and profit to two decimal places. QS = PS = QC= PC = n= 2. Compute the ordinary-demand curve for Steel America freight. Qs = f(PS) = 3. Compute the ordinary-demand curve for Corn International freight. QC = 1(PC) = 4. Calculate point price elasticities of demand for each customer class at the profit-maximizing prices and quantities identified in question #1. Round price elasticities two decimal places. eps = epc = 5. Are the differences in the elasticities in question #4 consistent with the computed prices in question #1? Record your answer by letter, e.g., 5.K. A The higher-inelastic ex is consistent with the lower Pc. B The lower inelastic ers is consistent with the higher P. C The higher elastic ers is consistent with the higher Ps. D The lower elastic ex is consistent with the lower Pc. E The higher elastic ex is consistent with the lower Pc