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SAFC is a monopolist that sells in two countries

Question # 00621198
Subject: Economics
Due on: 11/23/2017
Posted On: 11/23/2017 01:28 PM

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SAFC is a monopolist that sells in two countries and practices price discrimination by charging separate prices in each country. SAFC produces at a constant marginal cost MC = 10. Demand in Market 1 is Q1 = 60 - p1. Demand in Market 2 is Q2 = 15 - 0.5p2.


What price will be charged in each market?


Suppose a third party enters the market, not as a producer, but as a re-seller, capable of re-selling by transporting the goods from market to market at a cost of $14 per unit. How does this affect SAFC's price?

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SAFC is a monopolist that sells in two countries

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