Determine the optimal price for each sub-group, Financial Accounting

The objective is to assess the incentive to acquire information on consumer characteristics. We consider a monopoly. The firm incurs no production cost. There are M consumers with unit demand. Consumers' valuation for that good, denoted v, is uniformly distributed on the interval [0, 1] . A consumer with a valuation v buys the good if and only if the price for the good p is lower than v (p ≤ v). The firm a priori does not observe the valuation v. Nevertheless the monopoly has the possibility to acquire information, which will lead to a partition of the consumers into N subintervals of equal length. For instance if N = 2, the monopoly knows whether a consumer has a valuation in the interval [0,1/2] or [1/2,/1] and can set two different prices for each sub-group.

1. Determine the optimal price for each sub-group.

2. Deduce the profit of the monopoly. Is there a benefit to invest in information acquisition for the monopoly?

 

 

Posted Date: 4/2/2013 4:12:31 AM | Location : United States







Related Discussions:- Determine the optimal price for each sub-group, Assignment Help, Ask Question on Determine the optimal price for each sub-group, Get Answer, Expert's Help, Determine the optimal price for each sub-group Discussions

Write discussion on Determine the optimal price for each sub-group
Your posts are moderated
Related Questions
Q. Stock dividends and stock splits have the following effects on retained earnings: Stock Splits Stock Dividends a. Increase No change b. No change Decrease c. Decrease Decrease d

The liquidation of the Marks, Norris, Smith, and Savannah partnership:

The cost of debt must be based upon the current market cost of debt. Where different kinds of debt are used estimates of more than one debt cost may be necessary and these costs we

Shannon Kampa is in talks with Resul Ozbayrak Leaseco, a leasing company, to rent store space for new stores that Shannon is considering adding to her high-end natural foods chain.

I need help with a mini accounting project. Here is a link to the questions I need answers to. Read the questions and instructions and if you think you can complete the case within

Emily Jackson, RSC Designs management accountant, is in charge of preparing the master budget for 2013.  She has gathered the following information: 1. Annual profit for the 201


economic substance as in recognition of revenue


Comparison with Sector Averages Any conclusion relating to the signs of overtrading needs to be put in the context of the normal values of accounting ratios indicated by the se