Whether the higher fare from first class passengers and lower fare from the coach passenger is a type of price discrimination .

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Answer 1

Question

Chapter 17, Problem 1DQ

To determine

Whether the higher fare from first class passengers and lower fare from the coach passenger is a type of price discrimination.

Expert Solution & Answer

Explanation of Solution

No, the practice of airlines to charge higher fare from the first class passengers while lower fares from the coach passengers is not a type of price discrimination.

This is because all first class passengers get more facilities, so as compare to the passengers in general coaches. The first class passengers have spacious and comfortable seats as compared to the seats of the coach passengers.

They also get free services like meals, blankets, attendants, and better security. The differences in the fare cannot be considered as price discrimination because the marginal cost associated with the facilities given to the first class passengers is very much higher than the marginal cost associated with the passengers of the general coaches.

Therefore, it is not suitable and apt to say that higher prices charged from first class passengers as compared to the coach passengers is a type of price discrimination.

Economics Concept Introduction

Concept introduction:

Price discrimination:

When different prices are charged from different people for the same good, then it is referred to as price discrimination. It is generally practiced in a monopoly market. Example: Senior citizens are charged less for tickets in rail transportation than normal people.

The main objective of price discrimination is to maximize profit. Prices are charged differently because different people have different elasticity of income. For example, senior citizens have higher elasticity of income, so they are charged less.

On the other hand, businessmen have lower elasticity of income, so they are charged more. It occurs when marginal costs are equal among all customers but prices are equal in spite variation in the marginal costs.

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16:10 ← BEC 3701 - Assignments-... KWAME NKRUMAH UNIVERSITY TEACHING FOR EXCELLENCE SCHOOL OF BUSINESS STUDIES DEPARTMENT OF ECONOMICS AND FINANCE ADVANCED MICRO-ECONOMICS (BEC 3701) Assignments INSTRUCTIONS: Check instructions below: LTE 1) Let u(q1,q2) = ln q₁ + q2 be the (direct) utility function, where q₁ and q2the two goods. Denote P₁ and P2 as the prices of those two goods and let M be per period money income. Derive each of the following: a) the ordinary or Marshallian demand functions q₁ = d₂ (P₁, P₂, M) for i = 1,2 [3 Marks] b) the compensated or Hicksian demand functions q₁ = h₂ (P₁, P2, M) for i = 1,2 [3 Marks] c) the Indirect Utility Function uº = v(P₁, P2, M) [3 Marks] d) the Expenditure Function E(P1, P2, U°) [3 Marks] e) Draw a diagram of the solution. There should be two graphs, one above the other; the first containing the indifference curves and budget constraint that characterize the solution to the consumer's choice problem; the second characterizing the demand…

Answer 2

Question

Chapter 17, Problem 1DQ

To determine

Whether the higher fare from first class passengers and lower fare from the coach passenger is a type of price discrimination.

Expert Solution & Answer

Explanation of Solution

No, the practice of airlines to charge higher fare from the first class passengers while lower fares from the coach passengers is not a type of price discrimination.

This is because all first class passengers get more facilities, so as compare to the passengers in general coaches. The first class passengers have spacious and comfortable seats as compared to the seats of the coach passengers.

They also get free services like meals, blankets, attendants, and better security. The differences in the fare cannot be considered as price discrimination because the marginal cost associated with the facilities given to the first class passengers is very much higher than the marginal cost associated with the passengers of the general coaches.

Therefore, it is not suitable and apt to say that higher prices charged from first class passengers as compared to the coach passengers is a type of price discrimination.

Economics Concept Introduction

Concept introduction:

Price discrimination:

When different prices are charged from different people for the same good, then it is referred to as price discrimination. It is generally practiced in a monopoly market. Example: Senior citizens are charged less for tickets in rail transportation than normal people.

The main objective of price discrimination is to maximize profit. Prices are charged differently because different people have different elasticity of income. For example, senior citizens have higher elasticity of income, so they are charged less.

On the other hand, businessmen have lower elasticity of income, so they are charged more. It occurs when marginal costs are equal among all customers but prices are equal in spite variation in the marginal costs.

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Answer 3

Question

Chapter 17, Problem 1DQ

To determine

Whether the higher fare from first class passengers and lower fare from the coach passenger is a type of price discrimination.

Expert Solution & Answer

Explanation of Solution

No, the practice of airlines to charge higher fare from the first class passengers while lower fares from the coach passengers is not a type of price discrimination.

This is because all first class passengers get more facilities, so as compare to the passengers in general coaches. The first class passengers have spacious and comfortable seats as compared to the seats of the coach passengers.

They also get free services like meals, blankets, attendants, and better security. The differences in the fare cannot be considered as price discrimination because the marginal cost associated with the facilities given to the first class passengers is very much higher than the marginal cost associated with the passengers of the general coaches.

Therefore, it is not suitable and apt to say that higher prices charged from first class passengers as compared to the coach passengers is a type of price discrimination.

Economics Concept Introduction

Concept introduction:

Price discrimination:

When different prices are charged from different people for the same good, then it is referred to as price discrimination. It is generally practiced in a monopoly market. Example: Senior citizens are charged less for tickets in rail transportation than normal people.

The main objective of price discrimination is to maximize profit. Prices are charged differently because different people have different elasticity of income. For example, senior citizens have higher elasticity of income, so they are charged less.

On the other hand, businessmen have lower elasticity of income, so they are charged more. It occurs when marginal costs are equal among all customers but prices are equal in spite variation in the marginal costs.

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Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 4

Question

Chapter 17, Problem 1DQ

To determine

Whether the higher fare from first class passengers and lower fare from the coach passenger is a type of price discrimination.

Expert Solution & Answer

Explanation of Solution

No, the practice of airlines to charge higher fare from the first class passengers while lower fares from the coach passengers is not a type of price discrimination.

This is because all first class passengers get more facilities, so as compare to the passengers in general coaches. The first class passengers have spacious and comfortable seats as compared to the seats of the coach passengers.

They also get free services like meals, blankets, attendants, and better security. The differences in the fare cannot be considered as price discrimination because the marginal cost associated with the facilities given to the first class passengers is very much higher than the marginal cost associated with the passengers of the general coaches.

Therefore, it is not suitable and apt to say that higher prices charged from first class passengers as compared to the coach passengers is a type of price discrimination.

Economics Concept Introduction

Concept introduction:

Price discrimination:

When different prices are charged from different people for the same good, then it is referred to as price discrimination. It is generally practiced in a monopoly market. Example: Senior citizens are charged less for tickets in rail transportation than normal people.

The main objective of price discrimination is to maximize profit. Prices are charged differently because different people have different elasticity of income. For example, senior citizens have higher elasticity of income, so they are charged less.

On the other hand, businessmen have lower elasticity of income, so they are charged more. It occurs when marginal costs are equal among all customers but prices are equal in spite variation in the marginal costs.

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Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 5

Chapter 17, Problem 1DQ

To determine

Whether the higher fare from first class passengers and lower fare from the coach passenger is a type of price discrimination.

Expert Solution & Answer

Explanation of Solution

No, the practice of airlines to charge higher fare from the first class passengers while lower fares from the coach passengers is not a type of price discrimination.

This is because all first class passengers get more facilities, so as compare to the passengers in general coaches. The first class passengers have spacious and comfortable seats as compared to the seats of the coach passengers.

They also get free services like meals, blankets, attendants, and better security. The differences in the fare cannot be considered as price discrimination because the marginal cost associated with the facilities given to the first class passengers is very much higher than the marginal cost associated with the passengers of the general coaches.

Therefore, it is not suitable and apt to say that higher prices charged from first class passengers as compared to the coach passengers is a type of price discrimination.

Economics Concept Introduction

Concept introduction:

Price discrimination:

When different prices are charged from different people for the same good, then it is referred to as price discrimination. It is generally practiced in a monopoly market. Example: Senior citizens are charged less for tickets in rail transportation than normal people.

The main objective of price discrimination is to maximize profit. Prices are charged differently because different people have different elasticity of income. For example, senior citizens have higher elasticity of income, so they are charged less.

On the other hand, businessmen have lower elasticity of income, so they are charged more. It occurs when marginal costs are equal among all customers but prices are equal in spite variation in the marginal costs.

Answer 6

Chapter 17, Problem 1DQ

To determine

Whether the higher fare from first class passengers and lower fare from the coach passenger is a type of price discrimination.

Expert Solution & Answer

Explanation of Solution

No, the practice of airlines to charge higher fare from the first class passengers while lower fares from the coach passengers is not a type of price discrimination.

This is because all first class passengers get more facilities, so as compare to the passengers in general coaches. The first class passengers have spacious and comfortable seats as compared to the seats of the coach passengers.

They also get free services like meals, blankets, attendants, and better security. The differences in the fare cannot be considered as price discrimination because the marginal cost associated with the facilities given to the first class passengers is very much higher than the marginal cost associated with the passengers of the general coaches.

Therefore, it is not suitable and apt to say that higher prices charged from first class passengers as compared to the coach passengers is a type of price discrimination.

Economics Concept Introduction

Concept introduction:

Price discrimination:

When different prices are charged from different people for the same good, then it is referred to as price discrimination. It is generally practiced in a monopoly market. Example: Senior citizens are charged less for tickets in rail transportation than normal people.

The main objective of price discrimination is to maximize profit. Prices are charged differently because different people have different elasticity of income. For example, senior citizens have higher elasticity of income, so they are charged less.

On the other hand, businessmen have lower elasticity of income, so they are charged more. It occurs when marginal costs are equal among all customers but prices are equal in spite variation in the marginal costs.

Answer 7

Chapter 17, Problem 1DQ

To determine

Whether the higher fare from first class passengers and lower fare from the coach passenger is a type of price discrimination.

Answer 8

Expert Solution & Answer

Explanation of Solution

No, the practice of airlines to charge higher fare from the first class passengers while lower fares from the coach passengers is not a type of price discrimination.

This is because all first class passengers get more facilities, so as compare to the passengers in general coaches. The first class passengers have spacious and comfortable seats as compared to the seats of the coach passengers.

They also get free services like meals, blankets, attendants, and better security. The differences in the fare cannot be considered as price discrimination because the marginal cost associated with the facilities given to the first class passengers is very much higher than the marginal cost associated with the passengers of the general coaches.

Therefore, it is not suitable and apt to say that higher prices charged from first class passengers as compared to the coach passengers is a type of price discrimination.

Answer 9

Expert Solution & Answer

Answer 10

Expert Solution & Answer

Answer 11

Economics Concept Introduction

Concept introduction:

Price discrimination:

When different prices are charged from different people for the same good, then it is referred to as price discrimination. It is generally practiced in a monopoly market. Example: Senior citizens are charged less for tickets in rail transportation than normal people.

The main objective of price discrimination is to maximize profit. Prices are charged differently because different people have different elasticity of income. For example, senior citizens have higher elasticity of income, so they are charged less.

On the other hand, businessmen have lower elasticity of income, so they are charged more. It occurs when marginal costs are equal among all customers but prices are equal in spite variation in the marginal costs.

Answer 12

Ch. 17 - Prob. 1DQ Ch. 17 - Prob. 2DQ Ch. 17 - Prob. 3DQ Ch. 17 - Prob. 4DQ Ch. 17 - Prob. 5DQ Ch. 17 - Prob. 6DQ

Whether the higher fare from first class passengers and lower fare from the coach passenger is a type of price discrimination .

Concept explainers

Whether the higher fare from first class passengers and lower fare from the coach passenger is a type of price discrimination.

Explanation of Solution

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Chapter 17 Solutions