producer has the possibility of discriminating between the domestic and foreign markets for a product where the demands, respectively are: Q1 = 21 - 0.1P1 Q2 = 50 - 0.4 P2 Total cost = 2000 + 10Q, where Q = Q1 + Q2 What price will the producer will charge in order to maximize profit (a) with discrimination between markets and, (b) without discrimination, (c) compare the profit between discrimination and nondiscrimination.

producer has the possibility of discriminating between the domestic and foreign markets for a product where the demands, respectively are: Q1 = 21 - 0.1P1 Q2 = 50 - 0.4 P2 Total cost = 2000 + 10Q, where Q = Q1 + Q2 What price will the producer will charge in order to maximize profit (a) with discrimination between markets and, (b) without discrimination, (c) compare the profit between discrimination and nondiscrimination.

Managerial Economics: A Problem Solving Approach

5th Edition

ISBN:9781337106665

Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor

Publisher:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor

Chapter14: Indirect Price Discrimination

Section: Chapter Questions

Problem 14.4IP

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