--%>
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 : Economy in Bulgaria What is the economy

    What is the economy in Bulgaria like?

    		•
  • Q : Problem on Substitute Goods declining

    The market demand curve for the potatoes would shift to the left in reaction to: (1) New research pointing that eating French fries helps prevent cancer. (2) Potato lovers becoming alarmed regarding the rumored potato shortage. (3) Genetic engineering methods that mak

    		•
  • Q : Monopoly competition and perfect

    Write down the differentiations between monopoly competition and perfect competition?

    		•
  • Q : Constant-cost in short-run

    In a constant-cost, there purely-competitive industry in the short-run: (w) and long-run supply curves are positively sloped. (x) and long-run supply curves are negatively sloped. (y) and long-run supply curves are horizontal. (z) sup

    		•
  • Q : Labor History-Blacklisting I have a

    I have a problem in economics on Labor History-Blacklisting. Please help me in the following question. Firms which colluded by circulating the names of the union organizers and hence they would have complexity getting jobs were engaged is now-illegal

    		•
  • Q : Engage market power in price

    If this is possible, firms along with market power engage in price discrimination to: (i) defy civil rights legislation. (ii) help consumers. (iii) help the community. (iv) increase their profits. (v) reduce production costs.

  • Q : Earn incentive to work When welfare

    When welfare recipients are needed to pay back $1 of benefits for each $1 of wages they earn, it will: (w) enhance the incentive to work. (x) weaken the incentive to work. (y) have no effect on the incentive to work. (z) reduce welfare benefits to the

    		•
  • Q : Consumer Surplus-Difference in amounts

    Kiley pays $1.00 for the cold Pepsi on a hot afternoon, however would be willing to pay $5.00. The $4.00 difference in such amounts is her: (i) Consumer surplus. (ii) Income effect. (iii) Economic gain. (iv) Marginal utility. (v) Pleasure coefficient.

    Q : Stages of production One of my friends

    One of my friends can't succeed to get the answer of this question. Give solution of this question. Described the stages of production and in which stage will production occur and why?

    		•
  • Q : Instance Diminishing Marginal Utility

    Assume that you were permitted to eat as many ‘free’ jelly beans as you want at present. Subsequent to a few, you start to eat more slowly and to select some flavors over others. You might ultimately stop eating a ‘free’ and enjoyable good sinc

    		•