Currently, perfect price discrimination-in which eachperson is charged a price at (or a smidge below) theirreservation price, which is also their marginal benefit-ismostly a hypothetical scenario. However, as datamining becomes more ubiquitous, we may see marketsthat more closely resemble perfect price discriminationthrough individual pricing. a. Use a graph to illustrateperfect price discrimination. b. Explain how perfectprice discrimination benefits the seller and depict thenew producer surplus on the graph. c. Explain howperfect price discrimination benefits the buyer anddepict the new consumer surplus on the graph.d.Explain how perfect price discrimination impacts thetotal market quantity. e. Discuss whether the newequilibrium quantity is a socially optimum level.

Perfect Price Discriminationa. Graph of Perfect Price DiscriminationIn a perfectly…

Answered: Currently, perfect price…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Suppose that you are in charge of a toll bridge over the Mississippi River. The demand for bridge crossing Q is given by the following: 2P = 20 - Q a) How many people would cross the bridge if there were no toll? (YOU MUST SHOW YOUR WORK TO RECEIVE CREDIT) b) The toll bridge operator is considering setting up a price of $5.00. At that price, how many people will cross the bridge? (YOU MUST SHOW YOUR WORK TO RECEIVE CREDIT) c) How many people would cross the bridge if the toll is set at $10.00? (YOU MUST SHOW YOUR WORK TO RECEIVE CREDIT)
An airline has two types of passengers: business passengers with fairly tight schedules and inelastic demand for airline flights and vacation passengers with flexible schedules and more elastic demand for airline flights. The tables below show the demand information for both types of passengers and the market demand for a single airline flight. Business Traveler Demand Vacation Traveler Demand Market Demand Same Price for All Passengers Price Quantity Demanded Marginal Revenue (dollars) (seats) (dollars) Price (dollars) Quantity Demanded Marginal Quantity Marginal (seats) Revenue (dollars) Price (dollars) Demanded Revenue (seats) (dollars) $500 0 $500 0 $500 0 450 25 $400 450 0 450 25 $400.00 400 50 300 400 0 -- 400 50 300.00 es 350 75 200 350 50 $300 350 125 266.67 300 100 100 300 100 200 300 200 166.67 250 125 0 250 150 100 250 275 66.67 200 150 200 200 0 200 350 16.67 150 175 150 250 150 425 100 200 100 300 100 500 50 225 50 350 50 575 0 250 0 400 0 650 Instructions: Enter your…
Does a market equilibrium exist in an oglipolistic market? If so, how is it determined?
Help me please
If you cannot prevent resale of your good, which of these occurs when attempting price discrimination? You'll end up selling large quantities at a low price. You won't be able to sell much at the low price. You'll end up selling large quantities at a high price. The people who buy at high prices will then resell the good at a discount.
Assume the supply curve of the typical taxi cab driver in Chicago is P = 4 + 2Q. Suppose the market price is P = 12. Assume cab drivers, sellers of taxi services the in Chicago are regulated by a municipal authority. The regulatory authority charges the sellers a “license fee” that must be paid in order to obtain a license to operate a cab. What is the maximum license fee the regulators can charge? Use the concept of the “seller’s surplus” to answer the question.
What can you say about the price, with and without price discrimination
The widget market is competitive and includes no transaction costs. Five suppliers are willing to sell one widget at the following prices: $26, $14, $10, $5, and $3 (one seller at each price). Five buyers are willing to buy one widget at the following prices: $10, $14, $26, $34, and $42 (one buyer at each price). For each price shown in the following table, use the given information to enter the quantity demanded and quantity supplied. Price Quantity Demanded Quantity Supplied ($ per widget) (widgets) (widgets) $3 $5 $10 $14 $26 $34 $42 In this market, the equilibrium price will be per widget, and the equilibrium quantity will be widgets.
Exercises for Chapter 7 1. Recall exercise 1 from Chapter 5 in which an increase in the toll on a highway from $.40 to $.50 would reduce use of the highway by 5,000 cars per week. Because of the reduced use of the highway, demand in the secondary market for subway rides increases. Assuming that the price of subway rides is set equal to the marginal cost of operating the subway and marginal costs are constant (i.c., the supply schedule is horizontal), and no externalities result from the reduced use of the highway and the increased use of the subway, are there additional costs or benefits due to the inereased demand for subway rides? Why or why not? a. Because of the reduced use of the highway, demand in the secondary market for gasoline falls by 20,000 gallons per year. There is a stiff tax on gasoline, one that existed prior to the new toll. Assuming that the marginal cost of producing gasoline is $1 per gallon, that these marginal costs are constant (i.c., the supply schedule is…
Each rectangle on the graph corresponds to a particular seller in this market: blue (circe symbols) for Andrew, green (triangle symbols) for Beth, purple (diamond symbols) for Darnell, tan (dash symbols) for Eleanor, and orange (square symbols) for Jacques. (Note: The name labels are to the right of the corresponding segment on the supply curve.) Use the rectangles to shade the areas representing producer surplus for each person who is willing to sell a motor scooter at a market price of $70. (Note: If a person will not sell a motor scooter at the market price, indicate this by leaving their rectangle in its original position on the palette.) ? PRICE (Dollars per motor scooter) 160 140 120 100 180 60 40 20 0 0 Andrew 2 K Bet Darnell Jacques Eleanor 5 3 QUANTITY (Motor scooters) Market Price 6 7 8 ITI Andrew Beth Damell Eleanor 8 8 Jacques
What is the difference between price-fixing and predatory pricing? How do governments discourage firms from engaging in such practices?
Suppose that 2,000 people are interested in attending ElvisLand. Once a person arrives at ElvisLand, his or her demand for rides is given by x = max{ 5 – p, 0}, where p is the price per ride. There is a constant marginal cost of $2 for providing a ride at ElvisLand. If ElvisLand charges a profit-maximizing two-part tariff, with one price for admission to ElvisLand and another price per ride for those who get in. How much should it charge per ride and how much for admission? Correct answer is $2 per ride and $4.50 per admission, how does one solve this problem?

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