Microeconomics
Microeconomics
11th Edition
ISBN: 9781260507140
Author: David C. Colander
Publisher: McGraw Hill Education
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Chapter 14, Problem 3IP
To determine

The reason for selling something at a zero price by a firm.

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You are the manager of a monopoly that sells a product to two groups of consumers in different parts of the country. Analysts at your firm have determined that group s elasticity of demand is while group s is Your marginal cost of producing the product is $ a Determine your optimal markups and prices under thirddegree price discrimination. b Identify the conditions under which thirddegree price discrimination enhances profits.
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