A Weapons Producer Sells Guns to Two Countries That Are

question 8

Essay

A weapons producer sells guns to two countries that are at war with each other.The guns can be produced at a constant marginal cost of $10.The demand for guns from the two countries can be represented as:
QA = 100 - 2p
QB = 80 - 4p
Why is the weapons producer able to price discriminate?
What price will it charge to each country?

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Definitions:

Reputation

The general belief or opinion that people have about someone or something based on past actions or performances.

Malicious Prosecution

A legal action wrongfully initiated against someone without proper grounds, with the intent of causing damage or distress.

Criminal Conviction

A formal declaration that someone is guilty of a criminal offense, usually following a trial or plea of guilty.

Assault

An act that threatens physical harm to a person, whether or not actual harm is inflicted.