Price discrimination, Managerial Economics

Assignment Help:

Let there be two consumers A and B, each buying at most two units of a good. A values having one unit at £10 and having two units at £12 whereas B values having one unit at £8 and having two units at £16. There is a monopolist providing this good at zero cost but who cannot distinguish among the two consumers.

(a) What is the pro?t maximising uniform price of the good?

(b) Now suppose instead that the monopolist may design packages and charge one price for a single unit and a separate price for a package of two units. What will be the optimal prices?

(c) What kind of price discrimination is this (?rst, second or third degree)?

(d) Describe what the other two types of price discrimination would look like here?


Related Discussions:- Price discrimination

Average propensity to save, Average Propensity to save The Average Pro...

Average Propensity to save The Average Propensity to Save [APS] is defined as the fraction of aggregate national income which is devoted to savings.  Thus if S denotes savin

What is the reasons for shift in demand curve, Reasons for Shift in Demand ...

Reasons for Shift in Demand Curve Shifts in a price-demand curve may occur due to the change in one or more of other determinants of demand. Consider, for illustration, decreas

Price elasticity of demand, Price Elasticity of Demand Is the respons...

Price Elasticity of Demand Is the responsiveness of the quantity demanded to changes in price; its co-efficient is Pe d    =  Proportionate change in quantity demanded

Individual and market demand schedule, Individual and market demand schedul...

Individual and market demand schedule The plan of the possible quantities that will be demanded at different prices by an individual is called Individual demand schedule. Su

Explain the dilemma of the monetary agent, Problem 1: (a) Distinguish ...

Problem 1: (a) Distinguish between political and partisan monetary cycles on inflation and unemployment rates. (b) In the rule versus discretion literature, explain how dy

Meaning of desire for a commodity, Desire for a commodity This validat...

Desire for a commodity This validates that a want or a desire doesn't develop into a demand except it is supported by the ability and willingness to acquire it. For example, a

Public expenditure, PUBLIC EXPENDITURE The accounts of the central gov...

PUBLIC EXPENDITURE The accounts of the central government are centered on two funds, the Consolidated Fund, which handles the revenues form taxation and other miscellaneous re

Derevatives ., how to solve problems using derivatives ?

how to solve problems using derivatives ?

Infant industry argument - reason for protection, Infant Industry Argument ...

Infant Industry Argument Advocates of this maintain that if an industry is just developing, with a good chance of success once it is established and reaping economies of sale,

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd