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Kaleb is the only provider of bottled water for three cities. Because he has access to a natural spring, the marginal cost to produce an additional bottle is $0. Imagine he could price discriminate perfectly in this market. How much more profit would his firm earn if he practiced perfect price discrimination instead of practicing imperfect price discrimination (charging different prices in each city)

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Answer:

The correct profit which the bottled water company owed by Kaleb could earn is actually $55. This is as a result of his access to natural spring water. In a situation whereby he didn't have access to the natural spring, definitely, his profit is going to be more than $55.

Explanation:

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