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Question: A market consists of two population segments, A and B. An individual in segment A has demand for your product q = 50 - p. An individual in segment B has demand for your product q = 120 - 2p. Segment A has 1000 people in it. Segment B has 1200 people in it. Total cost of producing q units is C = 5000 + 20q.
(a) What is total market demand for your product?
(b) Assume that you must charge the same price to both markets. What is the profit-maximizing price? What are your profits?
(c) Imagine noe that members of segment A all wear a scarlet "A" on their shirts or blouses and that you cna legally charge different prices to these people. What price would you charge to the scarlet "A" people? What price would you charge to those without the scarlet "A"? What are your profits now?
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