On the following graph, use the black point (plus symbol) to indicate the profit-maximizing price and quantity. Next, use the purple points (diamond symbol) to shade the profit, the green points (triangle symbol) to shade the consumer surplus, and the black points (plus symbol) to shade the deadweight loss in this market without price discrimination. (Note: If you decide that consumer surplus, profit, or deadweight loss equals zero, indicate this by leaving that element in its original position on the palette.) PRICE (Dollars per pair of Stompers) 100 90 80 70 60 50 40 30 20 10 0 0 80 MC = ATC MR Demand 160 240 320 400 480 560 640 720 800 QUANTITY (Pairs of Stompers) Monopoly Outcome A Consumer Surplus ● Profit + Deadweight Loss ?

On the following graph, use the black point (plus symbol) to indicate the profit-maximizing price and quantity. Next, use the purple points (diamond symbol) to shade the profit, the green points (triangle symbol) to shade the consumer surplus, and the black points (plus symbol) to shade the deadweight loss in this market without price discrimination. (Note: If you decide that consumer surplus, profit, or deadweight loss equals zero, indicate this by leaving that element in its original position on the palette.) PRICE (Dollars per pair of Stompers) 100 90 80 70 60 50 40 30 20 10 0 0 80 MC = ATC MR Demand 160 240 320 400 480 560 640 720 800 QUANTITY (Pairs of Stompers) Monopoly Outcome A Consumer Surplus ● Profit + Deadweight Loss ?

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Currently, perfect price discrimination-in which each person is charged a price at (or a smidge below) their reservation price, which is also their marginal benefit-is mostly a hypothetical scenario. However, as data mining becomes more ubiquitous, we may see markets that more closely resemble perfect price discrimination through individual pricing. a. Use a graph to illustrate perfect price discrimination. b. Explain how perfect price discrimination benefits the seller and depict the new producer surplus on the graph. c. Explain how perfect price discrimination benefits the buyer and depict the new consumer surplus on the graph.d. Explain how perfect price discrimination impacts the total market quantity. e. Discuss whether the new equilibrium quantity is a socially optimum level.
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What can you say about the price, with and without price discrimination
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