A monopolist finds that the demand for its product varies by height: q = 3h — 2p, where h is the buyer's height. No resale is possible, so that the monopolist can price discriminate. Supposing the monopolist maximises profits, Taller people will pay higher prices and purchase a larger quantity than shorter people Taller people will pay lower prices and purchase a smaller quantity than shorter people Taller people will pay lower prices and purchase a larger quantity than shorter people Everyone will pay the same price, but older people will purchase more Taller people will pay higher prices and purchase a smaller quantity than shorter people

A monopolist finds that the demand for its product varies by height: q = 3h — 2p, where h is the buyer's height. No resale is possible, so that the monopolist can price discriminate. Supposing the monopolist maximises profits, Taller people will pay higher prices and purchase a larger quantity than shorter people Taller people will pay lower prices and purchase a smaller quantity than shorter people Taller people will pay lower prices and purchase a larger quantity than shorter people Everyone will pay the same price, but older people will purchase more Taller people will pay higher prices and purchase a smaller quantity than shorter people

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

See similar textbooks

Similar questions

A monopolist is producing an output and charging a price that maximizes its profit when it is unexpectedly confronted with an increase in its fixed costs. In response, a profit-maximizing monopolist will: Raise price to recover a portion of the higher fixed cost Continue to produce the same level of output and make no price change Lower price to ell enough units to cover the higher fixed cost Either raise or lower price depending on the price elasticity of demand.
A wholesaler (upstream firm) sells a product to a retailer (downstream firm). Both the wholesaler and the retailer are monopolists. The wholesaler faces a constant marginal cost of $2 and charges the retailer a wholesale price w. The retailer resells the product to final consumers at price P and the wholesale price w is its only cost. The demand for the good is P = 12 - Q. For your calculations below, assume that both the P and w are measured in dollars per unit. Hint: The retailer's profit function is π = (Pw)Q. a Find the profit-maximizing retail and wholesale prices and quantities.
A monopolist knows there are two customers with different demand curves for two differently sized bags of potato chips. Customer S would only buy the small bag and has a willingness-to-pay given by P=160-2q (where P denotes the price and q denotes the quantity). Customer L would buy the large bag and has a willingness-to-pay given by P=200-q. The monopolist does not know who is customer S and who is customer L. Marginal cost of production is zero. BEFORE second degree price discrimination, and if the monopolist perfectly price discriminated the small bag, what is the price of the small bag?
The monopolist must decrease price on all units of a product sold in order to sell additional units. This explains why: a monopoly has a perfectly elastic demand curve. (Omarginal revenue is less than price or average revenue. there are barriers to entry in monopoly. total revenues are greater than total costs at the profit maximizing level of output.
The demand for a monopolist’s output is 5,000/(p + 3)2, where p is the price it charges. At a price of $5, the elasticity of demand for the monopolist’s output is (Hint: is it positive or negative?) Please round your answer to two decimal places, if necessary.
Assume a monopolist produces rum and knows there are two groups of rum consumers, 1 and 2, with different price elasticities. Group 1 is highly price elastic with E1=-10; Group 2 exhibits a lower price elasticity of E2=-2.5. Assume the company can separate these two groups (e.g., by handing out special ID cards) and can charge two different prices. If P2=$14, how much can it charge to Group 1?
A monopolist sells 15 holiday greeting cards for $5.00 apiece. If the monopolist desires to sell a 16th card, then the price must be lowered to $4.90. The marginal revenue earned from selling the additional card is $
Single Price Monopolists produce where P=MC True False
true or false The oligopolist reduces the price of the good by 10%, but the competitors reduced their prices by 8%. As a result, the oligopolist only attracts only an additional 5% consumers from his competitors, This will reduce the total revenue of the oligopolist.
A monopolist is selling sneakers to students and non-students. The marginal cost of an extra pair of sneakers is 7$. Student demand is Q=189-P and no student demand is Q=400-2P. Right now they act as a single-price monopolist for the entire market. If they decide to do group price discrimination, what will be the CHANGE in prices for students?
A profit maximizing monopolist has a cost function C (q) = q,where q > 0 denotes the amount produced, and faces the aggregate demand curve q = 100/p² where p > 0 denotes the price per unit in the market. Assume that the monopolist chooses an optimal price in the range p E [1, 3]. The optimal price the monopolist would set up is while the Lerner index is_ Blank # 1 Blank # 2
Q4-11: Suppose we have a monopolist supplying two different markets. The demand in these markets is given by two types of consumers, each buying exactly one unit of the product a monopolist is selling so long as their consumer surplus is non-negative. If the consumer has a choice, she or he will buy the product that gives them the highest consumer surplus. the monopolist has estimated the indirect utility (CS) of each type of consumer as V₁ = 7z₁ - P₁ V₂ = 222 - P2 == where = {1,2} is the quality chosen by the monopolist i.e. vertical differentiation. The monopolist does not know each consumer's type. There are 397 type one consumers and 107 type two consumers. Finally suppose the marginal cost for all quantities is given by e(z) = 2. Q4-1: What are the lowest qualities type 1 and 2 consumers will demand. Q4- 3: What are the incentive compatibility constraints for type 1 and 2 Q4-4: The monopolist has three options: ■Sell only to high type consumers ■ Sell to both consumers the same…