Suppose a manufacturer creates a product with MC=18.The manufacturer sells the product both domestically and abroad. There is no difference in marginal cost and all conditions necessary to practice price discrimination have been met. The manufacturer is interest in maximizing profits by charging a higher price to consumers abroad.

Demand abroad (A) is characterized by the inverse demand curve P = 50 - 2Q.

Demand domestically (D) is characterized by the inverse demand curve P = 24.2 - 3Q.

What is the difference in prices between consumers abroad versus those at home (P_A-P_D)?

Assume that the price and income elasticities of demand for luxury cars are E_P= -0.52 and E_Y= 3.2 respectively. In the coming year, car prices are expected to decrease by 1.49percent and income increasesby 5.4 percent. Based on this information, sales of cars are expected toincrease by_____%.

The cross-price elasticity between two products is estimated to be 3. If the price of the first product is decreased by 6.9%, demand for the second product will change by_____%.