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8. Demand in “North” is PN = 100 – QN ; in “South” is PS =...

8. Demand in “North” is PN = 100 – QN ; in “South” is PS = 100 - QS in a country. Marginal cost of the firm in each market is equal to $20. Assume that fixed costs are zero. a) Suppose that the firm has to charge the same (uniform) linear price both in North and South. Find the critical value of  below which the firm prefers to only sell in the North, rather than selling both in the North and the South at the uniform linear price? b) At the critical value of , if the firm can charge a different price in the South and a different price in the North, What will be these prices, total output and firms’ total profits?

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