Third degree price discrimination, Microeconomics

Assignment Help:

Question: Third degree price discrimination

Suppose that a monopolist faces two markets with demand curves given by

D(p₁) = 100 - p₁
D(p₂) = 100 - 2p₂

Assume that the marginal cost is constant at 20.

Suppose the monopolist can price discriminate.

(a) What is the maximization problem of the monopolist?

(b) What price should it charge in each market in order to maximize pro?ts?

Suppose now that the monopolist can't price discriminate.

(d) What price should it charge?

(e) Compare the pro?ts of price discrimation versus uniform pricing. Compare the consumer surplus with price discrimation and uniform pricing

Related Discussions:- Third degree price discrimination

Elimination of waste - stock management, Elimination of waste - Stock Manag...

Elimination of waste - Stock Management Here is a definition of the elimination of waste: Anything other than the minimum amount of equipment, material, parts and working t

Consumer surplus, Two consumers John and grayson like to transfer songs to ...

Two consumers John and grayson like to transfer songs to their phones from jose phone the table represents their willingness to pay and jose willingness to accept for each download

Finding the rate of iodine clock reaction?, Volumes (mL) of Solution 0.20M ...

Volumes (mL) of Solution 0.20M 0.20M 0.010M 2% 0.20M 0.20M NaI NaCl Na2S2O3 Starch K2SO4 K2S2O8 ?2ml 2ml 2ml 1ml 2ml 2ml ?2ml 2ml 2ml 1ml 0ml 2ml ?4ml 0ml 2ml 1ml 2ml 2ml Time Exp

Supply, what happen when a supply shift to the right on a graph

what happen when a supply shift to the right on a graph

Welfare analysis, Welfare Analysis 1-Of the following four institution...

Welfare Analysis 1-Of the following four institutions for allocating apartment to different people at different prices i. The competitive market ii. A discriminatin

Iso, what is an iso curve

what is an iso curve

Rent control, Assume that the market equilibrium rent for two-bedroom apart...

Assume that the market equilibrium rent for two-bedroom apartments in Santa Monica, California is $1500 per month and the quantity is 40,000 units. The city council of Santa Monica

Labor-leisure analysis, Joe won $365,000 a year for life in the state lotte...

Joe won $365,000 a year for life in the state lottery. Use a labor-leisure choice analysis to answer the following: a. Show how Joe’s lottery winnings affect the position of his b

Maneferial, Plot the demand schedule and draw the demand curve for the data...

Plot the demand schedule and draw the demand curve for the data given for Marijuana

Service levels in supply chain management, Service levels in Supply Chain M...

Service levels in Supply Chain Management Consider that a finished product is made up of five inventoried component parts. If the service level were 90 per cent or 0.9 for eac

Write Your Message!

Name

Email id

Message

Verfication Code

User Account

All Pages