Principles of Economics (12th Edition)
12th Edition
ISBN: 9780134078779
Author: Karl E. Case, Ray C. Fair, Sharon E. Oster
Publisher: PEARSON
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Chapter 13, Problem 4.2P
To determine
Patronizing the locals and its benefits.
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Article: BIZ Community. 2023. Innovative sustainability trends give South Africa's coffee industry a caffeine kick, 21 June 2023. [Online]. Available at: https://www.bizcommunity.com/Article/196/87/239424.html# [Accessed 23 January 2023].
Q.4.1 Defend the use of third-degree price discrimination by Tribeca Coffee when entering new markets.
Note: you are required to provide at least two (2) application points.
Q.4.2 Identify two (2) common errors in pricing that Tribeca Coffee could be potentially exposed to when entering Ethiopia and recommend ways for the business to minimise the impact of such errors.
Q.4.3 Tribeca Coffee has decided to invest in its own fleet of vehicles to move its product across the SADC region. Explain how the business can capitalise on opportunities and minimise the impact of challenges in transportation technology.
In terms of reality, could you show that it is easier for a firm to practice second-degree price discrimination than it is for a firm to practice first-degree price discrimination? If you can use a graph, that would help me understand thank you.
Hersheypark in Pennsylvania mentions the following offer on its Web page: “A military discount is available at Hersheypark during the regular summer operating schedule off of the Regular, Junior and Senior One Day admission. This discount is available to active duty military, reserves, retired military personnel, and members of the National Guard.” This is _____ price discrimination.
Chapter 13 Solutions
Principles of Economics (12th Edition)
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- Some pizza joints charge more for delivered pizza than if customers pick up the pizza at the restaurant. Explain how this might be an example of third-degree price discrimination and provide another explanation for this pricing difference other than price discrimination.arrow_forwardFor each example, select the type of price discrimination (first degree, second degree, third degree, intertemporal, two part tariff, peak load pricing) that is being used. A firm charges each consumer their reservation price A tennis pro charges $15/hour for lessons for children and $30/hour for lessons for adults Amazon Prime charges $12.99/month plus the price of all goods purchased. A firm charges only $0.25 more for a large soda than a small soda. A firm charges more for electricity used during the day than at night.arrow_forwardIdentify nine common pricing methods.arrow_forward
- Please read the following article from The Atlantic on the proliferation of price discrimination for online shopping https://goo.gl/EGFynW A.) The article notes that we are moving toward a situation in which perfect price discrimination is no longer “only a classroom thought experiment.” Suppose perfect price discrimination were to become a reality. What would this imply as far as consumer surplus, producer surplus, and market surplus in the market for online retail? B.) The article references a study showing that by using big data online firms are able to boost profits. When firms engage in price discrimination and experience an increase in profits, does this imply that consumers are made worse off as a result? Explain. C.) Do you agree with the author’s belief that the proliferation of price discrimination “makes suckers of us all”? Explain. D.) Do you consider the increased price discrimination in recent years as a net positive or a net negative to society? Explainarrow_forwardThe figure to the right illustrates a restaurant's demand for early-bird meals (D,) and the demand for meals after 6 p.m. (D2) as well as each demand curve's corresponding marginal revenue curve. Assume the restaurant engages in price discrimination by charging different prices for early-bird meals and for meals after 6 p.m. 20.00- 18.00- 16.00- 14.00- 1.) Using the point drawing tool, indicate the profit-maximizing price and quantity for early-bird meals with price discrimination. Label this point "Early-bird." * 12.00- 10.00- 2.) Using the point drawing tool, indicate the profit-maximizing price and quantity for meals after 6 p.m. Label this point "Meals after 6." 8.00- Carefully follow the instructions above, and only draw the required objects. 6.00- 4.00- MC 2.00- MR. MR, D, D2 0.00- Ó 100 200 300 400 500 6ỏ0 700 800 9ó0 1000 Quantity Price and costarrow_forwardFast-food stores often charge higher prices for their products in high-crime areas than they charge in low-crime areas. Is this an act of price discrimination? Why or why not?arrow_forward
- The figure to the right shows an industry composed of a single monopolistic domestic firm. Initially, the firm sells its output exclusively in the domestic market. According to this figure, the profit-maximizing output level is units and the price is $ Now suppose that this domestic monopolist begins to sell in foreign markets as well, where it faces a perfectly elastic demand at $6.00. In the figure, using the line drawing tool, draw the demand curve this firm faces in its foreign markets. Label this line DF- Carefully follow the instructions above and only draw the required object. Now that this firm is operating in two segmented markets, the firm produces units of output and is accused of dumping because: O A. more output (4 units) is sold in foreign markets than at home (2 units). O B. the foreign price of $6.00 is less than the domestic price of $8.00. 10.00- 9.00- 8.00- 7.00- 6.00- 5.00- 4.00- 3.00- 2.00- 1.00- 0.00- 0 Cost, C and Price, P 1 MRDOM MC DDOM 4 9 Quantities produced…arrow_forwardPerfect price discrimination or first-degree price discrimination differs from second-degree price discrimination in that: in first-degree price discrimination, each consumer pays the highest price they are willing to pay for each unit purchased while in second-degree price discrimination, consumers will pay different prices for different quantities used. in first-degree price discrimination, each customer pays the highest price they are willing to pay for each unit purchased while in second-degree price discrimination only some of the consumers will pay the highest price they are willing to pay. in first-degree price discrimination, each customer pays the least amount that they are willing to pay for each unit purchased while in second-degree price discrimination each consumer gets the second unit purchased at his/her preferred price.arrow_forwardComplete the following table by matching each of the scenarios to the concept of resale price maintenance, predatory pricing, or bundling. Resale Price Maintenance Predatory Pricing Scenario Citron is a firm that manufactures electric scooters. Suppose Citron sells its electric scooters to online retailers for $830 each and requires those online retailers to charge at least $840 to shoppers for each electric scooter. Hynes sells a wide variety of condiments to retail grocery stores. Hynes recently developed two new condiments: a popular barbacuffalo and a much less popular green ketchup. Hynes requires grocery stores to order 10 bottles of the green ketchup for every 100 bottles of the barbacuffalo bought. Warm Winds is the only firm producing air fryers. It costs $430 to produce one air fryer, and Warm Winds sells each air fryer for $850. After Sirocco, a new firm with the same costs as Warm Winds, enters the market for air fryers, Warm Winds starts selling its air fryers for a price…arrow_forward
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