Question on first degree price discrimination

Reference no: EM1368351

Two consumers, Consumer 1 and Consumer 2, purchase the same product.
They have the following demand curves:

Q1 = 500 - 10 P and
Q2 = 500 - 20 P.

MC for the firm is $10.

(a) Compute the prices that should be charged to each customer if the seller is able to use first degree price discrimination.
(b) Is this a good strategy, or should the firm charge the same price to both customers?

Reference no: EM1368351

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