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Question 3. (Removing price discrimination) Suppose the Feed-forward Drug Corporation in question 2 cannot price discriminate due to the fact that the two markets cannot

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Question 3. (Removing price discrimination) Suppose the Feed-forward Drug Corporation in question 2 cannot price discriminate due to the fact that the two markets cannot be segmented and sealed. a) Derive the firm's single demand function under no price discrimination. (Hint: No price discrimination implies that Pg = Py = P. Use the two demand curves from question 2 to find total quantity sold: Q=QE + Qu which is the demand under no price discrimination when P is isolated on one side.) [6 marks] b) Derive the Feed-forward Drug Corporation's profit function under no price discrimination as a function of Q. (Hint: Profit-PxQ - TC where Q-QE+ Qy and Ps = Py = P.) [5 marks] c) If managers do not engage in price discrimination, which optimal price and output they would choose? [4 marks) d) Calculate the firm's optimal profit under no price discrimination. Is it greater than the profit under price discrimination you calculate in question 2? [3 marks]

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