Assume that a firm has the demand, marginal revenue and average and marginal cost curves shown aboveCalculate the firms profits with PERFECT PRICE discrimination Price384360336312288264240216192168144120967248240056112168224280336P392 448 504 560QuantityMR ---MC=AC1616 6721728 784 840 896

The first degree price discrimination is known as Perfect price discrimination. It occurs when the…

Answered: Price 384 360 336 312 288 264 240 216…

Price 384 360 336 312 288 264 240 216 192 168 144 120 96 72 48 24 0 0 56 112 168 224 280 336 392 448 504 560 616 672 Quantity MR <---MC=AC 728 784 840 896

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Concept explainers

Price Discrimination

Price discrimination or differential pricing is based on the principle that the seller will charge the buyer a price based on the buyer’s ability and willingness to pay for the product rather than applying uniform pricing for all.

Question

Assume that a firm has the demand, marginal revenue and average and marginal cost curves shown above

Calculate the firms profits with PERFECT PRICE discrimination

Price
384
360
336
312
288
264
240
216
192
168
144
120
96
72
48
24
0
0
56
112
168
224
280
336
P
392 448 504 560
Quantity
MR ---MC=AC
1
616 672
1
728 784 840 896

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