A firm manufactures a product that is sold on two different markets (A and B) that have the following demand functions: $$\begin{array}{l}
Q _ { A } = 100 - 0.50 P _ { A }\
Q _ { B } = 60 - 0.50 P _ { B }
\end{array}$$ The firm has the following marginal cost function: $$M C = 20 + 0.80 Q$$ If the firm is engaging in price discrimination, what prices should be charged on each market and how many units should be sold on each market?

Question

Quizplus · Accepted Answer

The Answer of A firm manufactures a product that is sold on two different markets (A and B) that have the following demand functions: $$\begin{array}{l}
Q _ { A } = 100 - 0.50 P _ { A }\
Q _ { B } = 60 - 0.50 P _ { B }
\end{array}$$ The firm has the following marginal cost function: $$M C = 20 + 0.80 Q$$ If the firm is engaging in price discrimination, what prices should be charged on each market and how many units should be sold on each market?

A Firm Manufactures a Product That Is Sold on Two QA=100−0.50PAQB=60−0.50PB\begin{array}{l}Q _ { A } = 100 - 0.50 P _ { A }\\Q _ { B } = 60 - 0.50 P _ { B }\end{array}QA​=100−0.50PA​QB​=60−0.50PB​​

A Firm Manufactures a Product That Is Sold on Two $\begin{array}{l}Q _ { A } = 100 - 0.50 P _ { A }\\Q _ { B } = 60 - 0.50 P _ { B }\end{array}$