Consider a weapons producer that is selling guns to two
countries that are at war with one another. Guns can be produced at
a constant marginal cost of $10 per gun. The demand for guns in
each of the countries is given by:
p = 50 - 0.5Q (Country A)
p = 20 - 0.25Q (Country B)
a. If the weapons producer can charge different prices to each
country, what price and quantity will it sell to each?
b. If...