1. Suppose that there is only one firm which produces a certain good and that there are two different types of people A and B. People A and people B values that good differently. The demand of people A is P=60-Q. The demand of people B is P=40-Q. The firm can either charge the same price in both markets or set different prices in each. Which of the followings is correct?
a. The producer surplus is smaller under the single price setting.
b. The producer surplus is the same regardless of the price settings.
c. The producer surplus is larger under the single price setting.
d. The consumer surplus is the same regardless of the price settings.