Similarly,for the second group of consumers,we must have MR2=MC Therefore,we see that prices and output must be set so that MR=MR2=MC (marginal revenue must be equal across groups of consumers and must equal marginal cost.) Determining relative prices: MR=P(1+1/E) MR1=P1(1+1/E),MR2=P2(1+1/E2) PP2=(1+1/E2)/1+1/E) Similarly, for the second group of consumers, we must have MR2 = MC Therefore, we see that prices and output must be set so that MR1 =MR2 = MC (marginal revenue must be equal across groups of consumers and must equal marginal cost.) Determining relative prices: MR = P(1+1/Ed ) MR1 = P1 (1+1/E1 ), MR2 = P2 (1+1/E2 ) P1 /P2 = (1+1/E2 )/(1+1/E1 )