3 A producer has the possibility ofdiscriminating between the domestic andforeign market for a product where thedemands respectively are:Q₁ = 20 -0.2P₁Q2 = 13.5 -0.25P2Total cost=45+30Q, where Q= Q₁+Q2a) What price will the producer charge inorder to maximize profits?With discrimination betweeni)marketsii)markets.b) Compare the profit differential betweendiscrimination and non-discrimination.Round all intermediate and final answers tothe nearest cent, 2 d.p.i)Market 1Q₁=20-0.2P₁1. TR₁=Q₁-Q₁²2. MR₁=Q₁3. MC=4. Q₁=5. P₁=$Without discrimination between6. TRIMAX= $7. TC=$TPmax=$Market 2Q2=13.5-0.25P₂TR₂=Q₂-Q₂²MR₂=Q₂MC=Q₂ =P₂=$TR2MAX= $SAME8. Combined TRmax= $ SAMEii) Without price discrimination:↑ ii) Without price discrimination:Use fractions in reduced form, if not terminatingdecimals.Q=P can use decimalsP=Q use fractions in reduced form1.TR=Q-Q²2.MR=Q3. MC=4. Q=5. P=$round to the nearest cent6. TRmax=$round to the nearest cent7. TC=$8. TPmax=$round to the nearest centb) Compare the profit differential betweendiscrimination and non-discrimination.Round all intermediate and final answers to thenearest cent, 2 d.pProfit differential between discrimination and non-discrimination: $

Given Domestic demand function: Q1=20-0.2P1 ... (1.1) Foreign demand function:…

A producer has the possibility of discriminating between the domestic and foreign market for a product where the demands respectively are: Q₁ = 20 -0.2P₁ Q2 = 13.5-0.25P2 Total cost= 45+30Q, where Q= Q₁+Q₂ a) What price will the producer charge in order to maximize profits? With discrimination between i) markets ii) Without discrimination between markets. b) Compare the profit differential between discrimination and non-discrimination.