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A monopolist sells in two states and practices price discrimination (3rd degree of price discrimination) by charging separate prices in each state. The monopolist produces at constant marginal cost MC = 10. Demand in market 1 is Q1 = 50 - P1. Market 2 demand is Q2 = 90 - 1.5P2. Why is the firm able to price discriminate? What price will be charged in each market?

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