--%>
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 : Inequality of Income in Loren Curve A

    A Lorenz curve which is more bowed away from a 45 degree line indicates larger: (w) degrees of economic competition. (x) success for anti poverty programs. (y) equality of income. (z) inequality of income. How can

    		•
  • Q : Relative concept about poverty A

    A predictable reluctance through modern welfare recipients to trade all they own for the material possessions of a rich person by a much earlier period would be evidence which poverty is: (w) easily solved by income redistribution pro

    		•
  • Q : Case of heroin in public policies When

    When heroin were legalized in that case: (w) its price would fall and fewer addicts would connect in crime to support their habits. (x) the attractiveness of becoming a supplier would increase. (y) more people might experiment along with the drug since the price is re

    		•
  • Q : Output level at wholesale price on

    When the wholesale price per dozen roses is $4.50, the breakeven point for Rose Garden Wholesalers happens at an output level of about: (i) 2000 dozen roses. (ii) 2500 dozen roses. (iii) 3000 dozen roses. (iv) 3500 dozen roses. (v) 40

    		•
  • Q : Production and costs in monopolistic

    In the short run, no profit-oriented monopolistically-competitive firm still knowingly generates any output unless: (1) an economic profit is assured. (2) total revenues are expected to equal or exceed its total variable costs. (3) the average wage ra

    		•
  • Q : Leftward shift of PPC What does

    What does leftward shift of PPC point out? Answer: It points out underutilization of resources.

    		•
  • Q : Calculations of price elasticity of

    At a price of $50, the demand for DVD games is roughly: (w) perfectly elastic. (x) perfectly inelastic. (y) unitarily elastic. (z) relatively inelastic.

    Q : Effects of Globalization On Indian

    On Indian industry what are the effects of globalization?

    		•
  • Q : Types of Surveys Types of Surveys :

    Types of Surveys: Surveys can be classified by their method of data collection. Mail, telephone, and in-person interview surveys are the most common. Extracting data from samples of records is also frequently done.

    		•
  • Q : Should third World limit pollution ‘In

    ‘In developing countries there are some controls on aspects of pollution like exhaust fumes. How would you evaluate whether these countries, from their point of view, must invoke legislation to enhance the atmosphere in these respects?’

    		•