You are the manager of a firm that charges customers $16 per unit for the first unit purchased, and $12 per unit for each additional unit purchased in excess of one unit. The accompanying graph summarizes your relevant demand and costs. Price 20 18 16 14 12 10 8 6 4 2 1 2 3 4 Quantity MO-AC D 5 6 7 a. What is the economic term for your firm's pricing strategy? First degree price discrimination O Fourth degree price discrimination O Third degree price discrimination O Second degree price discrimination
You are the manager of a firm that charges customers $16 per unit for the first unit purchased, and $12 per unit for each additional unit purchased in excess of one unit. The accompanying graph summarizes your relevant demand and costs. Price 20 18 16 14 12 10 8 6 4 2 1 2 3 4 Quantity MO-AC D 5 6 7 a. What is the economic term for your firm's pricing strategy? First degree price discrimination O Fourth degree price discrimination O Third degree price discrimination O Second degree price discrimination
Chapter1A: Appendix: Working With Graphs
Section: Chapter Questions
Problem 1E
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Question
![Price
You are the manager of a firm that charges customers $16 per unit for the first unit purchased, and $12 per unit for each additional unit
purchased in excess of one unit. The accompanying graph summarizes your relevant demand and costs.
0 18 16 + 12 10
20
14
8
6
4
2
0
1
2
3
4
Quantity
MC-AC
D
5 6 7
ernal browser=0&launchUrl=https%253A%252F%252Fnewconnect.mheducation.com%252F#/activity/question-grow
a. What is the economic term for your firm's pricing strategy?
First degree price discrimination
O Fourth degree price discrimination
O Third degree price discrimination
O Second degree price discrimination
Seved
b. Determine the profits you earn from this strategy.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fbf4f1839-c6be-4497-9a36-0b82bcf6bec8%2F018bfd44-53f7-42b3-b3f5-bc9a35673e0d%2Fq3kklbw_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Price
You are the manager of a firm that charges customers $16 per unit for the first unit purchased, and $12 per unit for each additional unit
purchased in excess of one unit. The accompanying graph summarizes your relevant demand and costs.
0 18 16 + 12 10
20
14
8
6
4
2
0
1
2
3
4
Quantity
MC-AC
D
5 6 7
ernal browser=0&launchUrl=https%253A%252F%252Fnewconnect.mheducation.com%252F#/activity/question-grow
a. What is the economic term for your firm's pricing strategy?
First degree price discrimination
O Fourth degree price discrimination
O Third degree price discrimination
O Second degree price discrimination
Seved
b. Determine the profits you earn from this strategy.
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How do I determine the profits you earn from second degree price discrminationstrategy and how much additional profit would you earn if you were able to perfectly discriminate?
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