--%>
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 : Functional Distribution of Income

    Computing the relative shares of national income accounted for by wages, interest, rent, and profit, yields, respectively measures called the: (1) market distribution of income. (2) functional distribution of income. (3) objective distribution of inco

    		•
  • Q : National Income in Equality Standard As

    As per the equality standard of income distribution: (w) people should be paid according to their needs for income. (x) income should be distributed to resource owners. (y) justice requires national income to be divided equally. (z) people should be p

    		•
  • Q : Lexicographic preference ordering I

    I have problem in this question. What is lexicographic preference ordering? Provide me correct answer of this.

    		•
  • Q : Demand curve for peanuts Question: a)

    Question: a) Johnny consumes peanuts (x1) and a composite good (x2). His utility function is U = x1x2. His marginal utilities are MU1 = x<

    		•
  • Q : Adequate resources to escape a state of

    When individuals or families have adequate resources [for example, employment opportunities] to escape a state of destitution, although choose not to, they are experiencing as: (1) involuntary poverty. (2) relative poverty. (3) a vicious cycle of pove

    		•
  • Q : Profit-maximizing monopolists I have a

    I have a problem in economics on Profit-maximizing monopolists. Please help me in the following question. Profit-maximizing monopolists exploit the labor since: (i) Workers are paid very less than the value of their average physical products. (ii) The

    		•
  • Q : Capital or current account Is import of

    Is import of machinery recorded in capital or current account? Answer: It is recorded in current account since it deals as the purchase of goods.

    		•
  • Q : Changes in price influencing supply

    Describe how changes in the prices of other products influence the supply of a specific product.

    		•
  • Q : Absolute value of demand slope Since

    Since the price drop/falls and quantity demanded rises all along this demand curve for pizza, the absolute value of slope will be: (1) Is constant and elasticity falls. (2) Elasticity are constant. (3) Drop/falls and elasticity is constant. (4) Elasti

    		•
  • Q : Public policies to protect by limiting

    The government breakup of AT and T within various regional telephone companies and deregulating long distance services are illustrations of government: (w) enforcement of company size ceiling regulations. (x) creation of monopoly powers. (y) trying to

    		•