What kind of price discrimination, Managerial Economics

Assignment Help:

Imagine an amusement park with a sole attraction: a roller coaster. For simplicity, the cost of providing a ride is zero. There is a single consumer with demand for rides on the roller coaster given by P(Q)=1 - Q. Let the park not only charge a price p per ride but also an access fee F at the entrance.

(a) What is the pro?t maximising combination of p and F? Illustrate graphically. [Hint: ?rst, for a given price per ride p, how much is the consumer willing to pay to access the roller coaster - you know a measure for that, and this will be the optimal ?xed fee for any given p,say F(p). Looking at the corresponding pro?ts, you will see what the optimal p is.]

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

(c) Is there still an ineffciency?

(d) Do your answers change if there are instead many, say e. g. 100, identical consumers with the given demand?


Related Discussions:- What kind of price discrimination

The determination of equilibrium national income, THE DETERMINATION OF EQUI...

THE DETERMINATION OF EQUILIBRIUM NATIONAL INCOME National income is said to be in equilibrium when there is no tendency for it either to increase or for it to decrease.  The a

Describe the public utility monopoly, Q. Describe the Public Utility Monopo...

Q. Describe the Public Utility Monopoly? Public Utility Monopoly:   Governmental authorities seize complete management and control of some utilities to protect social interest

Characteristics of oligopoly, Oligopoly can be characterized as follows: ...

Oligopoly can be characterized as follows: Small Number of Sellers: There are more than one sellers of a product though; the number isn't so huge in order to produce perfect

Digressive tax, DIGRESSIVE TAX A tax is called digressive when the hig...

DIGRESSIVE TAX A tax is called digressive when the higher incomes do not make a due contribution or when the burden imposed on them is relatively less. Another way in which

Compensatory financing, Compensatory Financing Two other schemes for a...

Compensatory Financing Two other schemes for alleviating the effects of commodity trade instability have been operating for a number of years.  These are the IMF's Compensator

Electron control inc, electron control,inc.,cells voltage regulators to oth...

electron control,inc.,cells voltage regulators to other manufacturers , who then customize and distribute the products to quality assurance labs for their sensitive test equipment.

Limitations of uneven distribution of income and wealth, Limitations of Une...

Limitations of Uneven Distribution of Income and Wealth Unlike the historical experience of the now developed countries, the rich in contemporary Third World Countries are not

Volatility of the stock market, You have been provided with daily data star...

You have been provided with daily data starting in January 2009 on the main New Zealand stock market index, the NSX-50. Choose a suitable model for measuring volatility on the New

Environmental degradation, Comment on the consequences of environmental deg...

Comment on the consequences of environmental degradation on the economy of a community.

Social cost of unemployment, The Social Cost of Unemployment i.      F...

The Social Cost of Unemployment i.      For the individual, there is the demoralizing effect which can be devastating particularly when they are old.  This is because as some

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