Problem: Two consumers, Consumer 1 and Consumer 2, purchase the same product.
They have the following demand curves:
Q1 = 500 - 10 P and
Q2 = 500 - 20 P.
MC for the firm is $10.
(1) Calculate the prices that should be charged to each customer if the seller is able to use first degree price discrimination.
(2) Is this a good strategy, or should the firm charge the same price to both customers?