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Question:
(a) Assume a firm operates in one location but serves on two distinct markets, namely, 1 and 2. The demand functions are:
Market 1: P1 = 40 - 0.3 Q1 Market 2: P2 = 60 - 2 Q2
And, the total cost function is given as:
TC = 100 + 0.15 Q
Calculate the profit maximising price and output for each market.
(b) Diagrammatically describe part (a).
(c) Describe the conditions under which price discrimination is feasible.
identify which curve (demand or supply) will be affected?
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