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3. Shell Designs, Inc. faces the following monthly demand for its designer coffee mugs, which arehand-made using a special clay from imported from Costa Rica: The average cost of producing each hand-made coffee mug is $4, and costs are constant. If ShellDesigns decides to sell its coffee mugs over the Internet, it will have to charge a uniform price. a. How many mugs will Shell sell and what are Shell’s monthly profits under uniform pricing? Suppose, Shell Designs decides to sell its mugs only at art and craft shows and employs a salesperson with the uncanny ability to negotiate with buyers and discover exactly the maximum pricethey will pay for a hand-made coffee mug (in other words, practice first degree price discrimination). b. How many mugs will Shell sell and what are Shell’s monthly profits under first degree pricediscrimination?

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