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.

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

(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

Define the concepts price elasticity of demand, Question 1: Define the ...

Question 1: Define the concepts price elasticity of demand, income elasticity of demand and cross elasticity of demand and explain how these concepts can be useful to the man

Accountant, In this assignment you will apply consumer choice theory and ma...

In this assignment you will apply consumer choice theory and marginal analysis to business problems. Consider each of the following products and services: a pair of tickets to a s

High risk individuals, a) Describe and derive the equilibrium contract offe...

a) Describe and derive the equilibrium contract offered to high risk individuals.                                             b) Describe and derive the equilibrium contract offe

Demand and Supply , Demand and supply curve for french breads

Demand and supply curve for french breads

Explain the marginal rate of technical substitution, Marginal rate of techn...

Marginal rate of technical substitution in the theory of production is similar to the concept of marginal rate of substituent to in the indifference curve analysis of consumer dema

Official reserve account, Official Reserve Account: This part of the bal...

Official Reserve Account: This part of the balance of payments informs us about how the balance of both current and capital accounts taken together is settled.Transaction in thi

The demand for big macs, Ask question #Min1) Illustrate and explain the cha...

Ask question #Min1) Illustrate and explain the changing demand for big Mac using the indifference curve and budget line.imum 100 words accepted#

Determine the consumer surplus and the average price per cup, Suppose the d...

Suppose the demand curve for a consumer for coffee is: Q = 6 – 2P, where Q represents the number of cups per day and P is the price of coffee per cup.  Question: Sppose the co

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