Question 1. How do costs vary from firm-to-firm? What real-world examples do you have of how costs vary from firm-to-firm?
Question 2. What is the difference between a normal profit and an economic profit? According to the economic model of pure/perfect competition, economic profits are not possible in the long run. Why not?
Question 3. What other examples do you have of how suppliers can segregate the market based on the price elasticity of demand? Why would consumers need to have different elasticity's of demand for market segregation and price discrimination to occur?
Question 4. "Countries that trade with the United States where the product sells for less; usually. This happens because there are more substitutes for the product making it an elastic demand."
Differentiate among the pure competition, monopolistic competition, oligopoly, and monopoly market models in a global environment.
In addition, price discrimination is related to market structure, as the three conditions necessary for price discrimination are:
-Monopoly power (control over price and quantity).
- Market segregation, which " . . . is usually based on [consumers having] different elasticityâ??s of demand . . ."
- No resale. (McConnell & Brue, 2005, p. 452)
Do you agree with above contentions? Is price discrimination more likely to occur within domestic markets or within international markets? Why or why not?