Question: Stargazer Recordings sells compact discs in two markets. The marginal cost of each disc is $2. Demand in each market is given by Q1 =

Stargazer Recordings sells compact discs in two markets. The marginal cost of each disc is $2. Demand in each market is given by Q1 = 40 – 10P1 and Q2 = 40 – 2P2 where Q is thousands of compact discs.
If the firm uses price discrimination how much output should it produce and what price should it charge? What is its profit? What type of price discrimination is it using?

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