(a) A pharmaceutical company sells its patented drug in two different countries. Trading of pharmaceuticals across the two countries is not allowed. If the demand elasticity in both countries is the same, how would the pharmaceutical company go about deciding what price to charge in each country?
(b) If all consumers of a product have identical tastes,what pricing strategy maximizes the firm's profits and requires the least amount of information about demand? Explain.
(c) Explain why a firm can earn more profit by price discrimination than from setting a uniform price.