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

Impact of inflation, THE IMPACT OF INFLATION Inflation has different e...

THE IMPACT OF INFLATION Inflation has different effects on different economic activities on both micro and macro levels.  Some of these problems are considered below: i.

Disadvantages of product differentiation , Disadvantages of product differe...

Disadvantages of product differentiation   a) Product differentiation generally reduces the degree of competition in the market.  It does this in two ways:          i.

Arguments against protectionism, Arguments against protectionism   Mos...

Arguments against protectionism   Most of the arguments for protectionism may be met with counter arguments, but underlying the economic arguments as opposed to the social, mo

Sales maximization, how realistic is the sales maximisation model from your...

how realistic is the sales maximisation model from your experience with business objectives as persued by firms

Production function with one variable input, explain production function il...

explain production function illustrate production with one variable input

Quantitative Analysis, How has quantitative analysis changed the current sc...

How has quantitative analysis changed the current scenario in the management world today? Focus must be on the business world specifically in the context of Asian Countries.

Marginal utility, Marginal Utility The extra utility derived from the ...

Marginal Utility The extra utility derived from the consumption of one more unit of a good, the consumption of all other goods remaining unchanged. The hypothesis of dimin

Demand and supply, The demand for good X is estimated to be:  where p x p...

The demand for good X is estimated to be:  where p x price of X in dollars M = personal disposable income in trillions of dollars per year P y = price of a competitive in do

Investment firm sells options, Let Consider an economy with three states. T...

Let Consider an economy with three states. The following set of stocks is traded:     x 1 =(2,2,0)    x 2 =(1,0,3)  x 3 =(0,2,4).          The t=0 prices of these stocks are give

National debt, NATIONAL DEBT Taxation does not often raise sufficient ...

NATIONAL DEBT Taxation does not often raise sufficient revenue for the Government Expenditure.  So, governments resort to borrowing.  This government borrowing is called Publi

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