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 revenue deficit in government

Revenue deficit in government budget: Whenever the revenue expenses of the government is more than the revenue receipts it is termed as revenue deficit Revenue expenditure > Revenue receipts

Q : Measurement of below poverty line Below

Below the poverty line the proportion of the U.S. population is: (w) rises with upturns of the business cycle. (x) has declined, though somewhat erratically, over the past 50 years. (y) has been virtually eliminated by a vigorous “War on Poverty

Q : Present Value of Annual Interest Rate

When the annual interest rate is 11 percent and a small office building can be expected to lease perpetually for price of $33,000 annually, the building and also the land it sits onto have a present value of approximately: (1) $363,00

Q : Determine price elasticity coefficient

In below this demonstrated figure, there demand curve: (w) D0D0 is perfectly price-inelastic. (x) DD is perfectly price-elastic. (y) DD has a price elasticity coefficient of unity (1). (z) D0D0 has a price e

Q : Price of Substitute goods What occurs

What occurs to the demand for a good whenever the price of Substitute goods downs?Answer: Whenever the price of substitute good downs, then the demand for the specified good too downs.

Q : Labor Unions and Aggregate salary Income

The least probable outcome when unions succeed in increasing their member’s salaries is that: (1) Wages in non-union sectors will drop. (2) Employment will produce in non-union sectors. (3) Barriers will be building up to limit the entry to unions. (4) Labor's s

Q : Least consistent demand curve with

The demand curve which is least consistent along with the existence of a substitution consequence is within: (w) Panel A. (x) Panel B. (y) Panel C. (z) Panel D.

Q : Monopsony Power and Demand for Labor

When wage discrimination is not possible for first 40 workers then this profit-maximizing firm hires, however it can wage discriminate perfectly whenever hiring all the subsequent workers, it hires a net of: (i) Forty workers at an average wage of the

Q : World price in market When for wheat

When for wheat the world price is $10 per bushel, and Del, who one owns the biggest wheat farm into North Dakota, will work at: (i) point a. (ii) point b. (iii) point c. (iv) point d. (v) point f.

Q : Reading Production Possibilities

I have a problem in economics on reading the Production Possibilities Frontiers graph. Please help me in determining the right answer from the following question. The graph below depicts the mythical country of the Sandwichia’s:

Discover Q & A

Leading Solution Library

Avail More Than 1432546 Solved problems, classrooms assignments, textbook's solutions, for quick Downloads

No hassle, Instant Access

Start Discovering

18,76,764

1946956
Asked

3,689

Active Tutors

1432546

Questions
Answered

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

Submit Assignment