--%>
Assignment Help - homework help

the perfect price discrimination

Suppose a monopolist has zero marginal cost and faces the following demand curve

D(p) = 10 - 2p

(a) Graph the demand curve, the marginal revenue curve, and the rm's marginal cost curve. Calculate the monopolist's price and output if she cannot engage in any type of price discrimination. Calculate the monopolist's pro ts at this price. Is the market operating eciently? Explain. In a general equilibrium context, explain the e ects of the monopolist on the allocation of goods and the use of resources in the economy.

(b) Suppose the monopolist can perfectly price discriminate. What prices will she charge?

Calculate the monopolist's pro ts under this pricing scheme. Is the market operating efficiently? Explain. Explain the diculty in engaging in this type of discrimination in terms of the revelation problem discussed in class.

(c) Suppose the demand curve represents that of a single consumer. If the monopolist engaged used a two-part tari to price its goods. Calculate the two-part tari (entry fee and per unit price) and the monopolist's pro ts. Compare and contrast this case with the perfect price discrimination case above.

(d) Suppose the monopolist used an all-or-nothing pricing scheme. Calculate the all-or-nothing price and the monopolist's pro ts. Compare and contrast this case with the perfect price discrimination case above.

(e) Given the information problems facing the monopolist, which of the later two cases would be easier to implement. Discuss the types of information that may be needed to implement each.

   Related Questions in Microeconomics

  • Q : Define Optimal Sample Size Optimal

    Optimal Sample Size: The optimal or suitable size of sample in a survey or poll is the function of four discrete factors: 1. Size of the population: The size of the

    		•
  • Q : Increase output to increase profit When

    When the last unit produced and sold adds $100 to revenue of a firm and $75 to its costs, this will: (a) increase output to increase profit. (b) reduce output to increase profit. (c) maintain similar level of output to maximize profit. (d) shut down.

    Q : Economic profits to entrepreneurs

    Economic profits are NOT recompenses to entrepreneurs who: (1) endure business uncertainty. (2) provide society along with economic capital. (3) innovate new goods and technologies. (4) exercise monopoly power or monopsony power. (5)

    		•
  • Q : Economic profit generating purely

    In this illustrated figure in below the only purely competitive firm currently generating economic profit is in: (w) Firm A. (x) Firm B. (y) Firm C. (z) Firm D.

    Q : Demonstrate supply curve for price

    The quantity supplied is ever more sensitive as output increases, therefore the price elasticity of supply raises as the price raises for the supply curve demonstrated in: (w) Panel A. (x) Panel B. (y) Panel C. (z) Panel D.

  • Q : Implication of buyers in market

    Describe the implication of big number of buyers in the perfectly competetive market.

    		•
  • Q : Price discriminate for maximizing profit

    Monsieur Cournot has a monopoly on an artesian well from that flows tasty spring water reputed to have medicinal properties. To ignore incurring variable costs, he is adamants that customers bring their own pails and also fill them in

    		•
  • Q : Produce output by profit-maximizing

    Unless this chooses to shut down since demand never exceeds average variable costs, in that case a profit-maximizing monopolist makes output where: (i) marginal revenue equals marginal costs [MR = MC]. (ii) marginal revenue minus marg

    		•
  • Q : Equilibrium in long-run purely

    When a purely competitive industry is into long-run equilibrium: (i) firms try to maximize profit. (ii) P = ATC. (c) P = MC. (iii) economic profit is zero. (iv) All of the above. Can someone explai

    		•
  • Q : Problem on buyers and sellers

    The supply and demand are affected by the time in sense that the longer the time interval considered, the: (1) Less sensitive sellers and buyers are to price changes. (2) Much sensitive sellers and buyers are to price changes. (3) Bigger is supply and

    		•