Continents can be expressed as a linear function

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Bayer is selling aspirin in both North America and Europe. The elasticity of demand in Europe is -1.5, but -1.4 in North America. It costs Bayer $2 to make a bottle of aspirin. Bayer sells 20 million bottles of aspirin quarterly in Europe, and 15 million bottles in North America. The demand on both continents can be expressed as a linear function. Recover the individual demand in both regions, and calculate the price Bayer would charge if it was forced to set a uniform price. Who would bene t and who would hurt from charging uniform price? Explain your answers and show all of your work for full credit.

Reference no: EM13816749

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