third degree price discrimination

Firm A has no costs of production and sells its products to just two buyers. The buyers (1 and 2) have the following demand functions:

P1 = 90 -10q₁

P2 = 60 - 5q₂

(a) Assuming that the rm can engage in third degree price discrimination, nd the profit maximizing prices. What is the rm's prot?

(b) Now, suppose that the monopolist can engage in multi-part pricing. Find a two part price schedule that generates more prot than the rm gets under third degree price discrimination. How much additional profit does it earn?

View Complete Question

Related Questions in Microeconomics

Q : What is Average Total Cost What is

What is Average Total Cost. Also write down its formula?

Q : Markets in a capitalistic economy

Markets within a capitalistic economy answer the “What?” question with: (1) government subsidies which promote new technologies. (2) giving those goods which consumers demand. (3) misleading advertising to persuade consumers to buy. (4) di

Q : Similarity between pure monopoly and

The demand curve facing a pure monopoly is similar to the: (w) sum of demand curves which face pure competitors. (x) "kinked" demands at the going market price. (y) the market demand curve for its product. (z) the firm's marginal reve

Q : Pure competition in product and

When no goods generate external costs or benefits within their consumption or production and when the income distribution is deemed acceptable, in that case economic efficiency is promoted through: (w) government inte

Q : Heterodox perspective One of my friend

One of my friend can't find the answer of this question.Give me answer of this question. From a heterodox perspective, the household is rarely indifferent while considering the profit of two bundles of goods.Why?

Q : Relationship between MPS and multiplier

Relationship between MPS and multiplier:K=1/1-MPC = 1/MPS or inverse relationship between MPS and the size of multiplier.

Q : Unitarily elastic demand by fixing all

A monopolist who does not price discriminate, that is: (w) cannot maximize profit by producing where demand is unitarily elastic. (x) will maximize profit where demand is unitarily elastic when all costs are fixed. (y) will maximize profit where deman

Q : Share of wages problem Can someone

Can someone please help me in finding out the accurate answer from the following question. The elasticity of demand for the labor tends to rise as there are increases in the: (i) Amount of capital utilized in a production procedure. (ii) Rate of automation in industry

Q : Example of Featherbedding Assume that

Assume that no job vacancies exist for the taxidermists, which students lack any interest in taxidermy, and that taxidermy produces no externalities. When lobbyists persuaded college Boards of Trustees to need taxidermy courses and to establish Departments of Taxiderm

Q : Profit maximization of an output level

Profit is maximized when this brickyard manufactures an output level of: (1) 6,000 generic bricks daily. (2) 7,000 generic bricks daily. (3) 15,000 generic bricks daily. (4) 17,000 generic bricks daily. (5) 20,000 generic bricks daily.

Discover Q & A

Leading Solution Library

Avail More Than 1432134 Solved problems, classrooms assignments, textbook's solutions, for quick Downloads

No hassle, Instant Access

Start Discovering

18,76,764

1950246
Asked

3,689

Active Tutors

1432134

Questions
Answered

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

Submit Assignment