posted by Ronald on .
If a firm supplies separable markets with price elasticities h1 and h2, it should set prices P1 and P2 so that:
a.P1 /h1 = P2 /h2
b.P1/(1 - 1 /h1) = P2 / (1 - 1/h2)
c.P1(1 + 1/h1) = P2 (1 + 1/h2)
d.P1 = 1 - 1/h1 and P2 = 1 - 1/h2
e.P1h1 = P2h2