--%>
Assignment Help - homework help

price discriminate

A monopolist selling several di erent products can sometimes "price discriminate" by bundling her products together. Here's an example. Suppose the U of C is planning to o er a series of two concerts. The rst program in the series consists of music by Chopin; the second, music by Stravinsky. There are four types of patrons with the following reservation prices (willingness to pay) for the concerts:

 Romantic Type: $40 for Chopin, $20 for Stravinsky  Modern Type $20 for Chopin $40 for Stravinsky

 Chopin Lover $45 for Chopin $5 for Stravinsky

 Stravinsky Lover $5 for Chopin $45 for Stravinsky

Suppose for simplicity that there is only one individual of each type and everyone can be accom-

modated at either performance. Also suppose the U of C does not know any individual's given

type.

(a) Suppose rst that separate tickets are o ered for the two concerts. What is the pro t

maximizing price per ticket?

(b) Suppose that only a single ticket for the series is o ered. What is the pro t maximizing

price for a series ticket? Have pro ts increased? What is the intuition for this result?

(c) Can you nd a more pro table alternative?

   Related Questions in Microeconomics

  • Q : Average variable cost at price of

    A monopoly facing a demand curve which has segments higher than its average variable cost curve that sets price: (w) equal to MR. (x) equal to marginal costs [MC]. (y) from the market demand curve after finding the quantity where is m

    		•
  • Q : Earn high incomes in purely competitive

    Into a purely competitive market economy, people along with rare and valuable talents would earn high incomes due to: (w) monopsonistic exploitation. (x) interest maximization. (y) economic rent. (z) transfer payments.

    Q : Jeremy Bentham utilitarianism Possible

    Possible utilization of a ‘felicific calculation’ to recognize punishments for the crimes was derived from: (1) Medieval scholasticism. (2) Say’s Law. (3) Gresham’s Law. (4) Marshall’s Maxim. (5) Jeremy Bentham&r

    		•
  • Q : Social opportunity cost of resource

    Economic rent is: (w) income received by a factor owner in excess of the social opportunity cost of supplying the resource. (x) the difference between a firm’s revenues and the sum of the fixed and variable costs of production. (y) a form of eco

    		•
  • Q : Marginal revenue by maximizes total

    A monopolist maximizes its total revenue where marginal revenue: (1) is flat. (2) is rising. (3) is zero. (4) equals marginal cost. (5) is negative. Can someone explain/help me with best solution a

    		•
  • Q : Change in total revenue by selling

    Marginal revenue, which is: (w) the change in total revenue from selling an additional unit of output. (x) the change in total revenue from hiring an additional unit of labor. (y) computed as TR/Q. (z) specified by change in Q / change in TR.

  • Q : Rates of Return of Cash Flow Assume

    Assume that an apartment complex is predicted to produce a consistent net $800,000 cash flow yearly in rent, after deducting all recurring variable costs (for example, taxes, utilities, and maintenance). When its current price is $10

    		•
  • Q : What is Marginal physical product

    Marginal physical product: It refers to the addition build to the total product.

    		•
  • Q : Facing a demand curve by purely

    A purely competitive firm faces a demand curve which is: (1) perfectly inelastic. (2) upward sloping. (3) perfectly elastic. (4) a vertical line. (5) downward sloping. Can anybody suggest me the proper explanation

    		•
  • Q : Personal distribution of income Select

    Select the right ans wer of the question. The personal distribution of income refers to the: A) division of income between personal taxes, consumption expenditures, and saving. B) division of income on the basis of industry sources, for example, agriculture, transport

    		•