price discriminate, A monopolist selling several dierent products can sometimes "price

+44 141 628 6080
[email protected]

--%>

price discriminate

A monopolist selling several dierent products can sometimes "price discriminate" by bundling her products together. Here's an example. Suppose the U of C is planning to oer 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 oered for the two concerts. What is the prot

maximizing price per ticket?

(b) Suppose that only a single ticket for the series is oered. What is the prot maximizing

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

(c) Can you nd a more protable alternative?

View Complete Question

Related Questions in Microeconomics

Q : Selling price by price elasticity of

At the point upon the demand curve for Silver Screen Classic DVDs, here the price elasticity of demand is unitary, the price would be approximately: (i) $10, resulting in roughly 8 million DVDs being sold. (ii) $13, resulting in appro

Q : Rational consumer-Relative Prices I

I have a problem in economics on rational consumer-Relative Prices. Please help me in the following question. The rational consumer purchasing decisions depend mainly on: (1) Current market prices. (2) Absolute prices. (3) Nominal prices. (4) Monetary prices. (5) Rela

Q : Example of acquisitions of merger The

The Overpriced Petroleum Extraction Company (or OPEC) has just declared its acquisition of some small firms with facilities which will permit OPEC to process oil via the whole refining procedure, from oil field recovery via transporting and then trading the refined pe

Q : Income rate variation in Loren curve

When you were unconcerned about the welfare of other people and your income rated you onto the top two percent of the population, then you would be happiest while the Lorenz curve for your country resembled as: (1) li

Q : Define multiplier Multiplier : It is

Multiplier: It is the number by which change in investment should be multiple in order to find out the resultant change in income and output.

Q : Example of predatory behavior Assume

Assume that a new Wal-Mart is built just outside a small town, and also Wal-Mart aggressively cuts prices therefore much that the rivals close their doors. In that case, once its rivals exit the market, the Wal-Mart raises prices significantly. Wal-Ma

Q : Ac illustrate a firm under monopolistic

illustrate a firm under monopolistic competition?

Q : Probable outcome of a shift problem The

The shift from D0 to D1 would be a probable outcome of: (i) An alter in the price of gasoline. (ii) Winter ending and summer coming, and hence more people take vacations. (iii) A reduction in the number miles driven. (iv) A rise in the cost of petroleum employed to ge

Q : Integrity and humanitarianism in

The economic system which depends associatively the least for its effectiveness and overall success on honesty and of members of economically and socially most elite groups in the system are nearly certainly: (1) Oligarchintegrity and hum

Q : Saving in Negatively Investment Saving

Saving is positively related to and investment is negatively related to: (1) marginal benefits and marginal costs. (2) real interest rates. (3) returns onto alternatives. (4) expectations. (5) government surpluses and deficits.

Discover Q & A

Leading Solution Library

Avail More Than 1430017 Solved problems, classrooms assignments, textbook's solutions, for quick Downloads

No hassle, Instant Access

Start Discovering

18,76,764

1938965
Asked

3,689

Active Tutors

1430017

Questions
Answered

Start Excelling in your courses, Ask an Expert and get answers for your homework and assignments!!

Submit Assignment