Suppose the manager in Technical Problem 7 decides to price-discriminate. The long run marginal cost is estimated to be

LMC = 4.5 + 0.005Q

a. How many units should the manager produce and sell?
b. How should the manager allocate the profit-maximizing output between the two markets?
c. What prices should the manager charge in the two markets?
d. Measured at the prices found in part c, which market has the more elastic demand?

Data From Problem 7

manager faces two separate markets. The estimated demand functions for the two markets are

Q_A = 1,600 − 80P_A     and     Q_B = 2,400 − 100P_B