Q: Illustrate and discuss the theory and application of “Peak Load” pricing strategy.
A: Peak load pricing is a type of price discrimination where the consumers are charged different prices…
Q: a) The marginal revenue of the firm is defined as the extra revenue a firm is able to generate when…
A: There are two types of market in the economy: 1) Perfect market 2) Imperfect market. The perfect…
Q: Explain how the application of price discrimination by a corporation is beneficial to society.
A: Price-Discrimination refers to a method where the producer charges different prices(P) to different…
Q: A publisher faces the following demand schedule for the next novel from one of its popular…
A: b. Compute marginal revenue. (Recall that MR = ΔTR/ΔQ.) How does marginal revenue compare to the…
Q: Describe Price Discrimination? Explain whether Price discrimination is possible in a perfectly…
A: Firms practices price discrimination in order to increase their profits or to maximize producer…
Q: $70 $60 $50 $40 $30 $20 LRATC LRMC $10 Demand = P MR $0 50 100 150 200 250 Output (Q) The diagram…
A: Q22AnswerThe firms produces at LRMC=P=LRATC in the long run.P=LRATC so the firms can earn zero…
Q: A restaurant offers fajitas for $14 at lunch and $18 at dinner. This is which type of price…
A: Price discrimination refers to a strategy where a monopolist charges different prices for the same…
Q: Which is better: Perfect Price Discrimination (1st Degree Price Discrimination) or Perfect…
A: In a market, perfect price discrimination refers to the situation when a producer charges different…
Q: . The market demand function for birthday cards in Greenwich Village is: P= 100-100. The total cost…
A: Perfect price discrimination or first degree price discrimination does not leave any consumer…
Q: The daily demand for bungee jumping over a river in South Africa is given by Q=5000-200P. There are…
A: given, demand curve = Q= 5000-200P or, P = 25 -Q/200Total Revenue curve = P.Q = 25Q - 1/200Q^2…
Q: The market demand function for birthday cards in Greenwich Village is: P = 100 − 10Q. The total cost…
A: Given The market demand function for birthday cards P =100-10Q .... (1) Cost function: C=…
Q: The perfectly competitive firm exhibits resource allocative efficiency (P = MC), but the…
A: A firm produces quantity of output at which P = MC ( price is equal to marginal cost). A perfectly…
Q: Price discrimination is only possible in perfect competition. True / False. Explain your answer…
A: Price discrimination refers to the phenomenon of charging a different price to different groups of…
Q: Explain the implication of the following: The feature of 'no close substitutes' under monopoly. 5
A: In the monopoly market structure there exists only one firm and this one firm serves all the market.…
Q: What is Price Discrimination for Price Searchers? Please give an example.?
A: We know that Price refers to the value of a good or service as quoted by the producer or supplier of…
Q: What is meant by price discrimination? What are the conditions to make price discrimination…
A: Price discrimination is defined as the price strategy in which the firms sell the same commodities…
Q: How is the demand curve perceived by a perfectly competitive firm different from the demand curve…
A: According to economic theory, perfect competition exists when all companies sell the same things,…
Q: Why do some firms practice price discrimination? Relate your answer to the common practice of public…
A: A pricing technique known as price discrimination is when companies sell the same goods or services…
Q: Output Total Total (Q) Price Revenue Cost 1 $20.00 $2.50 $15.00 $5.00 3 $10.00 $7.50 4 $5.00 $10.00…
A: Price discrimination refers to the practice of According different prices from different consumers…
Q: . When you go to your dentist, she charges you the full price for your clean and shine but the…
A: Price discrimination is the practice of charging certain groups of customers different rates for the…
Q: The millions of dollars already spent on development of new computer software (which will be…
A: New ideas, procedures, or scientific discoveries are protected by patents; brands, logos, and…
Q: The diagram above shows demand and long-run cost curves for a firm that has market power and can set…
A: In Perfect price discrimination the monopoly seller of a good or service must know the absolute…
Q: What is the surplus enjoyed by the firm when it is the sole supplier of the medicine? OA. $90 OB.…
A: The monopoly market structure has only one seller in the market. If is also the sole supplier…
Q: After the market changes from perfect competition to a monopoly.. OA. social surplus decreases B.…
A: A perfectly competitive market structure has a large no of sellers and buyers, this makes it…
Q: Which degree of price discrimination may cause favor for the consumer rather than producer? Explain…
A: The price discrimination is a pricing strategy often followed by a monopolist where different prices…
Q: The reservation prices, in dollars, for three classes of demanders (A, B, and C) for three…
A: Bundle pricing is a pricing strategy that involves offering two or more related products or services…
Q: Consider a monopolistically competitive firm in the short-run. The residual demand curve for the…
A: In a monopolistic competition market, the following two conditions are always satisfied in the long…
Q: Q1. Identify and illustrate graphically the similarities or differences between a perfectly…
A: The market is characterized by a large number of sellers and buyers with homogeneous products. The…
Q: Price and cost (dollars per item) 14 12 10 8 6 4 2 MR 0 5 10 15 MC = ATC 25 20 Quantity (millions)…
A: Step 1: Analyse the given diagram Step 2:Understand what is asked and connect it to given data Step…
Q: Explain with the aid of a diagram why perfect price discrimination is the same as an optimal two…
A: Price discrimination is the pricing strategy where the seller sells similar goods at different…
Q: Some universities charge students different tuition rates depending on their major, e.g., students…
A: Price discrimination is a selling strategy adopted by the sellers with control over market prices to…
Q: Because you know that competitive firms earnzero economic profit in the long run, you know the…
A: Average total cost refers to the approximate total cost of production at different levels of…
Q: According to the Hanson Production: Pricing for Opening Day Case Study by Peter Famiglietti, How…
A: Production: It refers to the produce goods and services in the economy. The more the production of…
Q: Price discrimination is only possible in perfect competition. True / False. Explain your answer…
A: The perfect competition is a type of market structure where there are large number of buyers and…
Q: d) What are the price and quantity if you a have fixed costs of 490? What is the profit? e) Consider…
A: Profit maximising is the point of equilibrium where MR= MC . Monopoly charges high price and and…
Q: Imperfect price discrimination is also known as: first-degree price discrimination. second-degree…
A: Consumer preferences vary, as does their willingness to pay for a product.When a company price…
Q: Typically, retail prices for clothing and shoes of a particular brand and style are the same…
A: The Total cost is the summation of the fixed cost and the variable cost of production. The fixed…
Q: price discrimination
A: Price discrimination can be defined as trading products at those prices which are not in proportion…
Q: Suppose the graph represent demand and marginal cost for a firm that is able to engage in perfect…
A: In a perfectly price discriminating market all the sellers have the knowledge regarding the consumer…
Q: Delores and Xavier, who manage a confection booth at a horse show, determine that to raise their…
A: The purchase and sale of formerly exchanged goods or services is commonly referred to as the market…
Q: In the following graphic, how much more will a 1st degree price discriminator make compared to a…
A: The price discrimination would result in the monopoly to charge the highest price and extract the…
Q: Explain in details whether the underlined part of statement is true or false. In a perfectly…
A: A perfectly competitive market is a market structure where there are many buyers and sellers. Buyers…
Q: Question 7 8f 18 Suppose that the corresponding graph relates to a firm that is able to engage in…
A: Perfect price discrimination occurs when a monopolist charges each consumer his willingness to pay.…
Q: QUESTION 4 Explain price discrimination. what are the conditions to make price discrimination…
A: Companies profit from price discrimination because it can persuade consumers to buy larger…
11. Name three major conditions necessary for a business firm to be able to successfully practice
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- 5(Chapter 11 Monopoly) The inverse demand for an app is P = PD (Q) = 30 - 0,4. Q. The inverse demand function indicated the price P, were the quantity Q will be sold. The app is sold just from the app developer. The programing of the app creats fixed costs of 420. The marginal costs are 2. a) Draw the demand curve b) Calculate the marginal revenue and the average cost function. Draw the marginal revenue and marginal cost function in the diagram of a). c) Determine the profit maximizing quantity and price. What are the average costs? What is the profit? Draw the average cost curve and the profit in the diagram. Show the consumer surplus (CS) and producer surplus (PS). d) What are the price and quantity if you a have fixed costs of 490? What is the profit? e) Consider the case that the developer of the App wants to maximize the overall welfare and not just his profit. Determine price and quantity. What is the profit? Show CS and PS. f) Draw the welfare losses of the Monopoly, which occur…A computer hardware firm sells both laptop computers and printers. Through the magic of focus groups, their pricing team determines that they have an equal number of three types of customers, and that these customers' reservation prices are as illustrated in the figure below. Customer A Customer B Customer C and a price for printers of Laptop $750 $950 $650 Assume for simplicity the marginal cost of production for laptops and printers is zero. If the firm were to charge only individual prices (not use the bundle price), what prices should it set for its laptops and printers to maximize profit? Assuming for simplicity that the firm has only one customers of each type, how much does it earn in total? To maximize profit using individual prices, the firm should charge a price for laptops of P= 650 P= 100 Printer $100 $50 $150 Bundle $850 $1,000 $800 (Enter your responses as whole numbers.) In turn, profit is = $ 2150 (Enter your response as a whole number.) After conducting a costly study,…A firm with market power can divide its sales into two submarkets, the demands and marginal revenues of which are shown in the following diagram. $ Price, marginal revenue, and marginal cost (dollars) 0.80 0.70 0.60 0.50 0.40 0.30 0.20 0.10 0 5 10 MRA 15 MRB 20 Quantity 25 DA 30 35 MC = ATC DB 40 (a) How many quantities of output should the firm produce? 1 45 Q (b) How many quantities should be sold to market A? How many quantities should be sold to market B? What price should be charged in each market? (c) Calculate the price elasticities at the prices charged in each submarket. Do these price elasticities have the expected relative magnitudes? Explain. (d) What is the amount of profit generated by the firm?
- The following graph illustrates the market for small moving trucks in Eugene, OR, during Oregon's fall move-in week. PRICE (Dollars per small truck) 100 Demand 90 Supply 80 70 28 80 50 40 30 20 10 0 0 1 2 3 4 5 8 9 10 QUANTITY (Hundreds of small trucks) Suppose that Zoomba is one of over a dozen competitive firms in the Eugene area that offers moving truck rentals. Based on the preceding graph showing the weekly market demand and supply curves, the price Zoomba must take as given is Fill in the price and the total, marginal, and average revenue Zoomba eams when it rents 0, 1, 2, or 3 trucks during move-in week. Quantity (Trucks) Price Total Revenue (Dollars per truck) (Dollars) 0 1 2 3 Marginal Revenue (Dollars) Average Revenue (Dollars per truck) 0 The demand curve faced by Zoomba is identical to which of its other curves? Check all that apply. Supply curve Average revenue curve Marginal cost curve Marginal revenue curveWhat’s the total profit in the market when the firm price discriminates between the two groups? How does this compare to when they just charge one price?Suppose the graph represent demand and marginal cost for a firm that is able to engage in perfect price discrimination. What is this firm's profit? 750 SA $ Price and costs $50 45 40 35 30 25 20 15 10 5 0 D MC = ATC 10 20 30 40 50 60 70 80 90 100 Downloads per hour
- Firm X is going to apply a 2nd degree price discrimination. They plan to charge P1 for the first units and P2 for the subsequent units. The inverse market demand curve is P=100 - 0.4q, and the total cost function is TC = 10q + 130. Answer the following questions: 4. the quantities (q1 & q2) the firm is going to sell after applying 2nd price discrimination are: O q1=300 and q2 =150 O q1=75 and q2 =150 O q1=150 and q2 =300 O qt=150 and q2 =75 5. the prices (P1 & P2) the firm is going to charge after applying 2nd price discrimination are: O P1=70 and P2=40 O P1=40 and P2=70 O P1=20 and P2=40 O P1=60 and P2=30Consider the single seller of diamonds where the demand curve and the marginal revenue curve are described as follows: P = 10,000 – Q and MR = 10,000 – 2Q. The quantity Q refers to the number of diamonds sold each week. The marginal cost of producing diamonds is constant at $4,000 each. (MC=2000). You do not need to draw a graph. . a. Calculate the profit-maximizing number of diamonds sold each week by this monopolist Show your work. Q = ___________. b. Calculate the price that the monopolist will charge for each diamond sold. P =_________. c. Finally, calculate the total profit earned by this monopolist if Total Costs = 1,000,000+4,000Q. Show your work!3. a. State the conditions needed for price discrimination?
- Please use profit max formula(s) Show step by step and write the answer at the end like "The max profit will be ___"Conditions for price discrimination Price discrimination is the practice of selling the same good at more than one price when the price differences are not justified by cost differences. Evaluate the following statement: "Price discrimination is not possible when a good is sold in a perfectly competitive market." False, because perfectly competitive firms do not profit - maximize by setting marginal revenue equal to marginal cost True, because perfectly competitive firms have no market power False, because perfectly competitive firms have market power None of these choices Examples of price discrimination Cho and Ginny are debating the use of coupons by grocery stores. Cho says, "The use of coupons in grocery stores represents a means of price discrimination. It's pure and simple. Coupons do reduce the price of groceries, but mostly to people who are less likely to buy at the full price." By contrast, Ginny contends, "Coupons do not constitute price discrimination. They simply…The graph below shows the demands and marginal revenue in two markets, 1 and 2, for a price discriminating firm along with total marginal revenue, MRT, and marginal cost: Price and cost (dollars) 100 80 60 AS 40 20 0 200 100 300 MR1 400 MR2 MC 500 Quantity How should the firm allocate sales between the two markets? 600 D₁ 700 MRT 800 900 D₂ 1000 Q
