What are the profit maximizing prices in europe

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Reference no: EM13198911

A drug manufacturer sells a major drug in Europe and in the United States. The demand curve for the drug in Europe is P E = 10 - Q E, where P E is the price (in dollars per pound) and Q E is the quantity (in millions of pounds) sold in Europe. The demand curve for the drug in the United States is P U = 20 - 1.5 Q U, where P U is the price (in dollars per pound) and QU is the quantity (in millions of pounds) sold in the United States. The total cost (in millions of dollars) of producing the drug is TC = 4 + 2 Q, where Q = Q E + Q U. If the drug manufacturer uses a third degree price discrimination strategy, then what are the profit maximizing prices in Europe and in the United States?

Reference no: EM13198911

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