Price Discrimination Example : There are 3 types of lip products, namely lipstick, lip balm, and lip cream. Each product has different prices and demand. Lipstick: P: 85.000, Q: 1340 Lip cream: P: 126.000, Q: 325 Lip balm: P: 31.000, Q: 789

Price Discrimination Example : There are 3 types of lip products, namely lipstick, lip balm, and lip cream. Each product has different prices and demand. Lipstick: P: 85.000, Q: 1340 Lip cream: P: 126.000, Q: 325 Lip balm: P: 31.000, Q: 789

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

Economic question

make the price discrimination graphic including the MC, AC, and MR line!

Price Discrimination
Example
: There are 3 types of lip products, namely lipstick, lip balm, and lip
cream.
Each product has different prices and demand.
Lipstick: P: 85.000, Q: 1340
Lip cream: P: 126.000, Q: 325
Lip balm: P: 31.000, Q: 789

Definition Definition Pricing strategy 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.

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Step 1: Define MC, AC and MR

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Step 2: Make a graph

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Step 3: Draw graph for lipstick

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Step 4: Draw graph for lipcream

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Step 5: Draw graph for lipbalm

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