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:

Divergent Thinking

A thought process or method used to generate creative ideas by exploring many possible solutions.

Heritability

The degree to which the variations in a trait from one person to another can be attributed to, or explained by, genetic factors.

Intelligence

refers to the ability to learn, understand, and apply knowledge to manipulate one's environment or to think abstractly as measured by objective criteria (tests).

Decentration

The cognitive ability to consider multiple aspects of a situation simultaneously, which is crucial in understanding complex scenarios and solving problems.