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

H.W. help, Suppose the price of printing paper for digital cameras has rece...

Suppose the price of printing paper for digital cameras has recently risen by 10 percent due to an increase in the cost of materials used in the finish for the paper. As a result,

Transfer payments, Transfer Payments: Governments typically redistribute a ...

Transfer Payments: Governments typically redistribute a share of tax revenues back to specified groups of individuals in form of several social programs (like welfare benefits, pub

Explain features of outward-oriented and inward-oriented, The main features...

The main features of outward-oriented and inward-oriented development strategies. Inward- oriented as focus on reducing domestic reliance on imports by executing high barrier

Demand , demand curve

demand curve

INDIFFERENCE CURVES, HOW TO REDUCE SMOKING USING INDIFFERENCE S AND BUDGETL...

HOW TO REDUCE SMOKING USING INDIFFERENCE S AND BUDGETLINE

Production cost, how can draw the table and diagram of production function ...

how can draw the table and diagram of production function function with one veriable

Strong domestic economy and strengthening the patent system, Strong Domesti...

Strong Domestic Economy: We have to realise that healthy export sector can be built up only on a strong and efficient domestic economic structure. A sound domestic economy is

Income elasticity coefficient, significance of income elasticity coefficien...

significance of income elasticity coefficient

Production possibility frontier, Halala is a small country that uses most o...

Halala is a small country that uses most of Its resources to produce fruits and vegetables. If the country produces only fruits it is able to produce 8000kg of fruit per year. If i

Pure competition markets, what is pure competition markets?

what is pure competition markets?

Write Your Message!

Name

Email id

Message

Verfication Code

User Account

All Pages