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Critique the suggestions from Brendan Flaherty and Jason Womack, as described in the e-mail from Michael Dellucci.

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A question in econometrics is thoroughly explored.

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Brendan suggested that we mark up the price by the same percentage above marginal cost in both markets. Because marginal cost is higher in Europe, that would mean we would be setting a higher price in Europe than in the United States.

We cannot mark up the price by the same percentage above the marginal cost, in both the markets because of several reasons; first, the marginal cost needs to be equal to marginal revenue for us to reach the profit maximizing level. In case of marking up the price by the same percentage above the marginal cost, we would not know the percentage of the markup that would help us reach the profit maximizing level. In addition, this suggestion completely ignores the elasticity of demand for each market. This would mean that if the elasticity of demand for one of the markets were relatively high it would lead to a mismatch between the marginal revenue ...

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