Intel offers baseline processors as well as higher end versions of the exact sameprocessors. The higher end versions are priced considerably higher and haveadditional features that the baseline versions do not have, but the marginal cost ofproducing both processors is virtually identical. This situation is an example of whatkind of price discrimination?A) Second DegreeB) Third DegreeC) First DegreeD) Two-Part Tariff

Price discrimination refers a situation where a consumer is charged different prices for the same…

Answered: Intel offers baseline processors as…

Managerial Economics: A Problem Solving Approach

5th Edition

ISBN:9781337106665

Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor

Publisher:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor

Chapter14: Indirect Price Discrimination

Section: Chapter Questions

Problem 14.2IP

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Multichoice company broadcasts to subscribers in Lusaka and Solwezi. The demand for each ofthese two groups are Qsz= 50 - (1/3) Ps and QUSK= 80 - (2/3) Pusk, where Q is in thousands ofsubscriptions per year and P is the subscription price per year. The cost of providing Q units.ofservice is given by C (Q) = 1000 + 30Q, where Q = Qsz + QusK. Assuming Multichoice is aMonopoly and can engage in third-price discrimination, then1. What is the profit-maximizing price and quantity in Solwezi Market?2. What is the profit-maximizing price and quantity in Lusaka Market?3. Suppose the Monopoly can only charge a single. What price should it charge and what isthe total quantity sold?
What is the optimal price to charge?
Under what conditions is cost-plus pricing mostappropriate?
Consider two internet service providers: ISP West and ISP East, offering internet access to a small town in north Kansas. They both have some estimations of the price elasticity of the demand facing them: Estimated Price Elasticity for ISP West: -1.25 Estimated Price Elasticity for ISP East:-1.125 They also have some estimations of their marginal cost, as defined by the monthly cost of adding one new unit (e.g., house, office, etc.) to their internet service network: Estimated Marginal Cost for ISP West: $23 Estimated Marginal Cost for ISP East: $30 Assuming that ISP West and ISP East engage in a Cournot duopoly, the profit maximizing price for ISP West is _____ dollars.
please note required detail
The price elasticity of demand for air travel differs radically from first-class (-1.3) to unrestricted coach (-1.4) to restricted discount coach (-1.8). Given these elasticities, what are the optimal prices (fares) on a cross-country trip with incremental variable costs (marginal costs) equal to $120? MR=Px(1+1/Ed) MC PED OP CLass ($) (Ed) (P*) First Class $120 -1.3 $ Unresticted coach $120 -1.4 $ Restricted Discount $120 -1.8 $
In small collegetowns, it is not uncommon that the rental market is dominated by one or a handful ofproperty management companies. Suppose demand for housing is given by MWTP(Qd)=2400-4QdSupply from the monopolistic landlord can be characterized by MC(Qs）=1500+Q°1. How many units will be rented in this collegetown? At what price?
The Talbot Company uses electrical assemblies to produce an array of small appliances. One of its high cost / high volume assemblies, the XO-01, has an estimated annual demand of 8,000 units. Talbot estimates the cost to place an order is $50, and the holding cost for each assembly is $20 per year. The company operates 250 days per year.
If your marketing department estimates that the semiannual demand for the highlander is q=150,000. - 1.5 P, what price should you charge in order to maximize revenues from the sales of highlander
Are there opportunities to combine volumes of spending from different busi- nesses, and standardize product requirements, reduce the number of suppliers providing these products, or exploit market conditions to receive better pricing?
A local video store estimates its customer's inverse demand per year is P = 30 – 4Q, and it knows the marginal cost of each rental is $5. If you engage in the first degree price discrimination, the profits are: A) $80.125 B) $84.5 C) $178.125 D) $86.75.
A market analysis employed by the “Sad Student Company” reveals that the number oflots of the game named “Handsome Killer: Revenge of the Teacher” ordered by thewholesalers when the game is offered at a price of dollars per lot is given by the formula:p=1500-2.5qa) Find the company’s total, marginal and average revenues b) Find the price and quantity maximizing the total revenue by first expressing therevenue as a function of price rather than of quantity

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