Question
The big pharmaceutical company AstraVenera released its globally patented covid vaccine on early 2021 in two bordering, but sharply different countries: Haiti (HA) and Dominican
The big pharmaceutical company AstraVenera released its globally patented covid vaccine on early 2021 in two bordering, but sharply different countries: Haiti (HA) and Dominican Republic (DR), with a strict ban on cross-border sales agreed with the Haitian government. The respective demand functions (in million units) for both countries are:
QHA=10-PHA
QDR=17-0.5PDR
The total cost (TC), in millions too, depends on the total amount of units produced Q = QDR+ QHA and also includes 30 million of fixed costs. TC follows the expression:
TC=30+2Q+Q2/8
Does AstraVenera meet the conditions necessary to implement price discrimination? Explain.
I am not sure how to prove or explain if astravenera meets the conditions
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