Price discrimination, Managerial Economics

Assignment Help:

Let there be two consumers A and B, each buying at most two units of a good. A values having one unit at £10 and having two units at £12 whereas B values having one unit at £8 and having two units at £16. There is a monopolist providing this good at zero cost but who cannot distinguish among the two consumers.

(a) What is the pro?t maximising uniform price of the good?

(b) Now suppose instead that the monopolist may design packages and charge one price for a single unit and a separate price for a package of two units. What will be the optimal prices?

(c) What kind of price discrimination is this (?rst, second or third degree)?

(d) Describe what the other two types of price discrimination would look like here?


Related Discussions:- Price discrimination

Show the example on transaction cost theory, Q. Show the example on transac...

Q. Show the example on transaction cost theory? Coase begins from standpoint that markets could in theory carry out all production and that what needs to be illustrated is th

Variable costs (vc), Variable Costs (VC) These are costs, which vary w...

Variable Costs (VC) These are costs, which vary with the level of production.  The higher the level of production, the higher will be the variable costs.  They are associated

Profession, list all profession which generate personal income

list all profession which generate personal income

Determine the perfectly competitive firms profit, 1. Suppose in a perfectly...

1. Suppose in a perfectly competitive industry the market demand and supply forces combine to produce a short-run equilibrium price of Rs 70. Suppose that a firm in this industry h

Define aunifying and omniscient theme, Define Aunifying and omniscient them...

Define Aunifying and omniscient theme Aunifying and omniscient theme found in managerial economics is the attempt to achieve optimal results from business decisions whereas tak

Nature of demand curves and elasticity, Usually, elasticity of a demand cur...

Usually, elasticity of a demand curve throughout its length isn't the same (Fig. below). It varies between 0 and ∞, or in other words, 0 ≤ e p ≥ ∞ In some cases, though, the

Total cost of factor combinations, Q. Total cost of Factor Combinations? ...

Q. Total cost of Factor Combinations? Here we try to find total cost of every factor combination and choose the one that has the least cost. Cost of every factor combination is

Bank deposit and credit creation, Bank Deposit Bank notes and coins to...

Bank Deposit Bank notes and coins together constitute the currency in circulation.  But they form only a part of the total money supply.  The larger part of the money supply i

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd