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 : Saving transaction costs by locations

Economic rent by a parcel of land is positively associated to the: (w) savings in transaction costs yielded by its location. (x) amount of idle land adjacent to this. (y) time this has been held by the current landowner. (z) amount of natural flora an

Q : Elasticity of Demand for Labor Can

Can someone help me in finding out the right answer from the given options. Absolute value of the proportional change in labor hired divided by the proportional change in the wage rate is termed as the: (1) Income or substitution coefficient. (2) Employment salary or

Q : Enter or exit the market in

A mix of heterogeneous goods and many potential buyers and sellers which are free to enter or exit the market within the long run are among essential conditions for an industry to be: (1) a monopoly. (2) purely competitive. (3) an oli

Q : Concept of Joseph A. Schumpeter about

The concept that innovation is a main source of economic profit is central to the concepts of: (1) Joseph A. Schumpeter. (2) Karl Marx. (3) Frank Knight. (4) Horatio Alger. (5) John Bates Clark. Ca

Q : Completely controls output of a product

Through the strict economic description that a monopoly is: (i) necessarily a very large firm. (ii) one of a few large firms that dominate a market. (iii) a lone firm which completely controls the output of a product along with no close substitu

Q : Differentiated goods in monopolistic

Several other market structures may pivot around goods which are heterogeneous, although the market structure which absolutely needs goods to be differentiated within the minds of consumers is. (i) perfect competition. (ii) pure competition. (iii) mon

Q : Comparing income and wealth As

As comparing income and wealth: (w) differences in their distributions reflect economic discrimination precisely. (x) wealth is a flow variable, whereas income is a stock variable. (y) inheritance explains income differences more totally than wealth d

Q : Consumers equilibrium in case of two

Describe the consumer’s equilibrium in case of two commodities (IC) approach. Answer: Consumer equilibrium refers to a condition when he spends his specified

Q : Economic theories Economic theories: A)

Economic theories: A) are useless because they are not based on laboratory experimentation. B) that are true for individual economic units are never true for the economy as a whole. C) are generalizations based on a careful observation of facts. D) are abstractions an

Q : Objective of firm in price

The firm's objective within price discrimination is to: (w) make the community better off economically. (x) make several consumers better off economically. (y) increase revenue and profit. (z) minimize average cost.

Discover Q & A

Leading Solution Library

Avail More Than 1457871 Solved problems, classrooms assignments, textbook's solutions, for quick Downloads

No hassle, Instant Access

Start Discovering

18,76,764

1942215
Asked

3,689

Active Tutors

1457871

Questions
Answered

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

Submit Assignment