I will provide each of these answers leading up to this point for context.(4) Suppose instead that the producer wants to engage in third degree price discrimination (market
segmentation).
(a) What market conditions must exist in order to engage in third degree price discrimination?
(b) Derive the marginal revenue function for market one.
(c) Calculate the profit maximizing price, output and profits in market one.
(d) Derive the marginal revenue function for market two.
(e) Calculate the profit maximizing price, output and profits in market two.
(f) Show your answers for a-e above graphically.
(5) Which pricing strategy produces the maximum profits?