A Weapons Producer Sells Guns to Two Countries That Are

question 55

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:
Q_A = 100 - 2p
Q_B = 80 - 4p
Why is the weapons producer able to price discriminate?
What price will it charge to each country?

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Definitions:

Right Atrium

The right upper chamber of the heart that receives deoxygenated blood from the body via the venae cavae.

Fenestrated Capillaries

Capillaries with small pores in their endothelial lining allowing for increased permeability to fluids and small molecules, found in areas requiring extensive exchange such as in kidneys and endocrine glands.

Kidney

A pair of organs located in the abdominal cavity that filter blood, remove waste products, and regulate fluid balance.

Pancreas

A glandular organ in the digestive system that produces insulin, digestive enzymes, and other hormones.