--%>
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 : Profit Maximization in Resource Markets

    I have a problem in economics on Profit Maximization in Resource Markets. Please help me in the following question. To make a decision regarding resource hire, the firm should consider: (1) The price of resource. (2) The productivity (MP) of resource. (3) Output price

    		•
  • Q : Moral Hazard evidence Cameron is

    Cameron is performing a research project on whale migration at Pacific Ocean. To assist with this research she hires a Ph.D. from the MIT to make computer software to organize data, paying the software genius $150,000 for his services. The Ph.D. assures Cameron that t

    		•
  • Q : Determine points where is most price

    Of all of the known ranges on given supply curves, the supply of tanks of dehydrated water is most price elasticity among: (i) point a and point b. (ii) point b and point c. (iii) point c and point d. (iv) point d and point e. (v) point e and point f.

    Q : Labor Productivity The American workers

    The American workers tend to be much productive than their counterparts in the South America or Asia in part as they have: (i) Superior natural genetic endowments. (ii) Access to the better sports programming, that promotes the team-work. (iii) More capital to work wi

    		•
  • Q : Determine demand curve for

    A tax will be forward-shifted totally when the demand curve is: (w) downward sloping and the supply curve are horizontal. (x) horizontal and the supply curve is upward sloping. (y) perfectly price inelastic and identical to the supply

    		•
  • Q : Kinked demand curve model of

    The kinked demand curve model of oligopolistic pricing behavior reflects the concept which: (1) price hikes fail to accommodate small hikes in costs. (2) other firms ignore price hikes by single firms. (3) other firms match any price cuts by any singl

    		•
  • Q : Determine relatively price elasticity

    A price elasticity of demand of 2.0 implies that at that point, the demand curve is: (w) income elastic. (x) relatively price elastic. (y) relatively price inelastic. (z) unitarily price elastic. I need a good answ

    		•
  • Q : Meaning of price taker To be a price

    To be a price taker implies: (w) the larger firm in the industry will set the price for all other firms. (x) the entire market (industry) sets the price for all firms to take. (y) each firm takes the price as specified by the government. (z) firms tak

    		•
  • Q : Monopsonistic exploitation-labor union

    The labor union contracts, a comparable worth rule, or minimum salary laws might boost up equilibrium employment when a firm has been practicing: (i) Price discrimination. (ii) Monopolistic exploitation. (iii) Feather-bedding. (iv) Blacklisting. (v) Monopsonistic expl

    		•
  • Q : Decreasing price of Complementary Goods

    The increase in demand for tartar sauce would be a probable result of: (1) A reduction in the price of fish. (2) An raise in the price of tartar sauce. (3) A bumper crop of the tartar sauce. (4) A raise in the price of fish. (v) The reduction in price

    		•