申論題

4. (25 points) 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 unit. The demand for guns in each of the two countries is given by:
P = 50 -0.5Q (Country A)
 P= 20 - 0.25Q (Country B)

(5) Is the deadweight loss higher under price discrimination or a single-price? Show mathematically.