You are the marketing manager of a firm that produces titanium and sells this metal to two distinct kinds of customers: aircraft producers and golf club manufacturers. Demand for titanium by these two market segments is quite different, as described by the respective price equations: PA = 10 - QA/600 and PG = 12 - QG/100, where annual quantities [QA and QG] are in thousands of pounds and prices [PA and PG] are in dollars. Your firm estimates the marginal cost of titanium production at $4 per pound.
(a) For each segment, determine the firm's profit-maximizing price and output. Is the firm practicing price discrimination?

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The Answer of You are the marketing manager of a firm that produces titanium and sells this metal to two distinct kinds of customers: aircraft producers and golf club manufacturers. Demand for titanium by these two market segments is quite different, as described by the respective price equations: PA = 10 - QA/600 and PG = 12 - QG/100, where annual quantities [QA and QG] are in thousands of pounds and prices [PA and PG] are in dollars. Your firm estimates the marginal cost of titanium production at $4 per pound.
(a) For each segment, determine the firm's profit-maximizing price and output. Is the firm practicing price discrimination?

You Are the Marketing Manager of a Firm That Produces