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MBA,PHD, Juris Doctor
Strayer,Devery,Harvard University
Mar-1995 - Mar-2002
Manager Planning
WalMart
Mar-2001 - Feb-2009
Now suppose that FM’s marginal and fixed costs are both zero. As noted above, the inverse demandin the domestic market for its cars is Pd(yd) = 4–Yd. FM also sells in the foreign market and facesinverse demand Pf (yf ) = 6– Yf/3.
What would FM’s profits be if it engaged in multimarket (3rd degree)price discrimination?(a) $27(b) $4(c) $31(d) $35(e) $625.
What would FM’s profits be if it could engage in perfect (first degree) price discrimination in bothmarkets?(a) $62(b) $54(c) $8(d) $31(e) $35
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