Suppose Blackish is a monopolist producer of a brand of jackets with a marginal cost of $8 and no fixed costs. The company sells these jackets both in the United States of America and in the European Union with the following yearly demand curves for jackets:

• If Blackish chooses to sell jackets in the USA, it faces an American demand of P=100-Q with Marginal revenue = 100-2Q.
• If Blackish chooses to sell jackets in the EU, it faces a European demand of P= 200-3Q with Marginal revenue = 100-6Q.
• If Blackish must sell jackets to both markets at the same price, it faces a total demand of P=125-0.75Q with Marginal revenue = 125-1.5Q

a) If Blackish cannot price discriminate,

• how much will it produce?
• how much will it charge?
• what would be its profit?

b) If Blackish can price discriminate,

• how much will it produce in each country?
• how much will it charge in each country?
• What would be its profit?

c) What price would Blackish charge per jacket if it were operating under perfect competition?