Given the industry demand function X(p) = 100 - 2p, consider the following scenarios: a) The market is a perfectly competitive market. Assume there are identical firms with marginal cost of 12 in this perfectly competitive market. b) The market is dominated by one monopolist with a marginal cost of 12. This monopolist is able to achieve first degree pricing. c) The market is dominated by one monopolist with a marginal cost of 12, but the monopolist is able to achieve only second degree pricing. Assume the menu offers only 2 choices: (Q1= 30; P1= 35), and (Q2= 60; P2= 20). d) The market is dominated by one monopolist with a marginal cost of 12, but the monopolist now uses third degree pricing. Assume the firm can distinguish between low-demand consumers on the weekday and high-demand consumers on the weekend such that Qh = 55 - (1/2)Ph and Ql= 45 - (3/2)Pl. The monopolist charges a difference price, Pl and Ph, in each distinct market. e) The market is dominated by one monopolist that is not able to price discriminate. Please calculate 1) Profits; 2) CS; 3) PS; 4) DWL; and 5) Quantity Sold in the market; for 1) Third Degree Pricing; 2) No Price Discrimination; and then 3) In this setting, if the monopolist has the opportunity to go from no price discrimination to first degree pricing for a fee of 800, should it make the switch? Why or why not?
Given the industry demand function X(p) = 100 - 2p, consider the following scenarios:
a) The market is a
b) The market is dominated by one monopolist with a marginal cost of 12. This monopolist is able to achieve first degree pricing.
c) The market is dominated by one monopolist with a marginal cost of 12, but the monopolist is able to achieve only second degree pricing. Assume the menu offers only 2 choices:
(Q1= 30; P1= 35), and (Q2= 60; P2= 20).
d) The market is dominated by one monopolist with a marginal cost of 12, but the monopolist now uses third degree pricing. Assume the firm can distinguish between low-demand consumers on the weekday and high-demand consumers on the weekend such that Qh = 55 - (1/2)Ph and
Ql= 45 - (3/2)Pl. The monopolist charges a difference price, Pl and Ph, in each distinct market.
e) The market is dominated by one monopolist that is not able to price discriminate.
Please calculate 1) Profits; 2) CS; 3) PS; 4) DWL; and 5) Quantity Sold in the market; for 1) Third Degree Pricing; 2) No
![Given the industry demand function X (p) = 100 – 2p, consider the following scenarios:
• The market is a perfectly competitive market. Assume there are identical firms with marginal
cost of 12 in this perfectly competitive market.
• The market is dominated by one monopolist with a marginal cost of 12. This monopolist is
able to achieve 1st degree pricing.
• The market is dominated by one monopolist with a marginal cost of 12, but the monopolist
is able to achieve only 2nd degree pricing. Assume the menu offers only 2 choices:
(Qi = 30, pi = 35), and (Q; = 60, p = 20).
• The market is dominated by one monopolist with a marginal cost of 12, but the monopolist
now uses 3rd degree pricing. Assume the firm can distinguish between low-demand consumers
on the weekday and high-demand consumers on the weekend such that Qh = 55 - ph and
Qe = 45 – Pe. The monopolist charges a difference price, pe and ph, in each distinct market.
• The market is dominated by one monopolist that is not able to price discriminate.
Calculate the following values and fill in the table according to the 5 scenarios above
1st Deg.
2nd Deg. | 3rd Deg. No Price Discrim.
Profits T
CS
PS
DWL
Quantity Sold
in Market
In this setting, if the monopolist has the opportunity to go from no price discrimination to 1st
degree pricing for a fee of 800, should it make the switch? Why or why not?](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F17ab369c-97f6-45ba-8fb6-749dc6447c4c%2F4d546c7b-488d-470f-984e-e7ab5264cba5%2Fpcmcank_processed.jpeg&w=3840&q=75)
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