Problem 1 (Monopoly, multi-plant, two markets, price discrimination) Luxottica produces Ray-Ban sunglasses in Italy and sells them in the US market. Let's assume that in the US the inverse demand for Ray-Ban glasses is Pus = 200 - 0.01Qus, and that Luxottica's total cost of producing Ray-Bans in Italy for the US market is TC, = 1000 + 20Q1 + 0.0107. The marginal cost is MC1 = 20 + 0.02Q1.e. Now assume that Luxottica can produce Ray-Bans only in the Chinese plant. But it can sell the sunglasses as the sole seller, in both the US and the Chinese markets. The inverse demand for Ray-Bans in China is: Pc = 100 0.01QDc. E1. If Luxottica cannot prevent resales across the two markets and must charge the same price in the US as in China, would Luxottz'ca sell any pair of Ray Bans in China? How many pairs are sold in each country, and what is the price per pair? E2. If Luxottica can charge different prices in the American and the Chinese markets (that is, Bird-degree price discrimination), what would be the price in each market, and how many pairs of Ray Bans would be sold in each market