Practicing price discrimination

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1. Do you agree or disagree: A price setter company (like a monopoly or an oligopoly) can earn greater profits by charging one price than by practicing price discrimination. Support your answer. Give example of how they do this.

2. What is price discrimination? Give three examples of it. What would NOT be an example of price discrimination? Which of the Four industries that we studied can do price discrimntaion? For a company what would be the ideal type of price discrimination?

3. What does a cartel OR a Kinked Demand Curve tell us about the nature of competition and collusion? Is it better to be a consumer where there is a cartel or kinked demand curve? Why? Pick one of the Two cases to examine for this question. Don't try to do both. Be specific and accurate.

4. What happens in the long run for the monopolistic competition firm and for the oligopoly firm? Which of the two are better for the consumer and why?

5. How are wages set in the labor market? Are workers and companies Wage (price) setters or wage (price) takers or both? Explain how a company or a worker can be a wage setter, while other companies and workers are wage takers. Hint: A wage setter is where the company/worker decide how much to pay/how much the wages should be and wage taker is where the company pays what the market wages are, no more or less.

Reference no: EM131053806

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