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?