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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?

Tags countries sells monopolist safc market price cost safc demand reseller capable producer enters party reselling transporting affect safcs does unit goods suppose charged prices country separate charging discrimination produces constant monopolist 05p2 sells countries

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SAFC is a monopolist that sells in two countries

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