A seller is said to practice price discrimination if it sells the same product at different prices to different consumers when costs are not different. Suppose that we consider an extreme form of price discrimination: that of perfect price discrimination. This occurs when the seller sells each unit of the good at a different price. 1. Suppose that we have a perfectly price discriminating monopolist. If the monopolist had the ability to charge different prices for every unit of the good, at what prices would he sell each unit? 2. Given your answer to part (1), what is the firm's MR curve? 3. Given part (2), what quantity will the monopolist produce (and sell) if it wishes to maxi- mize profits?

A seller is said to practice price discrimination if it sells the same product at different prices to different consumers when costs are not different. Suppose that we consider an extreme form of price discrimination: that of perfect price discrimination. This occurs when the seller sells each unit of the good at a different price. 1. Suppose that we have a perfectly price discriminating monopolist. If the monopolist had the ability to charge different prices for every unit of the good, at what prices would he sell each unit? 2. Given your answer to part (1), what is the firm's MR curve? 3. Given part (2), what quantity will the monopolist produce (and sell) if it wishes to maxi- mize profits?

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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