Elastic segment of the products demand curve

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Reference no: EM133318820

Generally, a profit maximizing firm will not price a product in the elastic segment of the products demand curve.
US pharma's sell the same drug in the US and Canada, Canadian prices are substantially lower than US prices. The United States bans drug re-importation from Canada to the US. If drug re-importation were allowed, buyer surplus in US would increase, seller surplus decrease.
Yet people here have learned that, in the fast-changing global metals market, Alcoa's contributions can no longer be counted on. This isn't Wenatchee's (Aluminum Smelter) first shutdown. In 2001, after nearly a half-century of continuous operation, the smelter was put in standby mode, or "curtailed", when the industry was hit by low aluminum prices and soaring energy costs. Alcoa restarted the smelter in 2004, only to shut down 11 years later when prices again fell." (Seattle Times, Aug. 26, 2017). Please explain
In the short run the MC curve is U-shaped.
If a firm can personalize prices (first degree price discrimination), buyer surplus would be reduced to zero.

Reference no: EM133318820

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