Microeconomics
11th Edition
ISBN: 9781260507140
Author: David C. Colander
Publisher: McGraw Hill Education
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Chapter 6, Problem 2QAP
(a)
To determine
Racial discrimination on car dealerships.
(b)
To determine
Explain that different elasticity allow racial or sexual discrimination.
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What can you say about the price, with and without price discrimination
Where will you see more price discrimination: In monopoly-type markets with just a few firms or in competitive markets with many firms? Why?
Complete the following table by indicating whether or not each scenario is an example of price discrimination.
Hint: To determine whether a scenario is an example of price discrimination, think about whether the market can be segmented into two groups that pay different prices for the same good.
Scenario
Price Discrimination
Yes
No
The price of a gallon of gas at a SwellGas station in the center of a densely populated suburban area is $3.89 per gallon, but the price of a gallon of gas at the SwellGas station at a rest area right off the highway is $4.65 per gallon.
A local boutique is having a sale on sweaters, but customers are not aware of the sale until they are already in the store. In other words, there is no advertising of the sale other than signs in the back of the store that cannot be seen from the outside. All sweaters are marked as 25% off.
Chapter 6 Solutions
Microeconomics
Ch. 6.1 - If when price rises by 4 percent, quantity...Ch. 6.1 - Prob. 2QCh. 6.1 - Prob. 3QCh. 6.1 - Prob. 4QCh. 6.1 - Prob. 5QCh. 6.1 - Prob. 6QCh. 6.1 - Prob. 7QCh. 6.1 - Prob. 8QCh. 6.1 - Prob. 9QCh. 6.1 - Prob. 10Q
Ch. 6 - Determine the price elasticity of demand if, in...Ch. 6 - A firm has just increased its price by 5 percent...Ch. 6 - When tolls on the Dulles Airport Greenway were...Ch. 6 - Prob. 4QECh. 6 - Prob. 5QECh. 6 - Prob. 6QECh. 6 - Prob. 7QECh. 6 - Economists have estimated the following...Ch. 6 - Prob. 9QECh. 6 - A newspaper recently lowered its price from 5.00...Ch. 6 - Once a book has been written, would an author...Ch. 6 - Prob. 12QECh. 6 - Prob. 13QECh. 6 - Suppose average movie ticket prices are 8.50 and...Ch. 6 - Which of the following producers would you expect...Ch. 6 - Prob. 16QECh. 6 - Prob. 17QECh. 6 - Prob. 18QECh. 6 - Prob. 19QECh. 6 - Prob. 20QECh. 6 - Prob. 21QECh. 6 - Prob. 22QECh. 6 - Prob. 1QAPCh. 6 - Prob. 2QAPCh. 6 - Prob. 3QAPCh. 6 - Prob. 4QAPCh. 6 - Prob. 5QAPCh. 6 - Price elasticity is not just a technical economic...Ch. 6 - Prob. 1IPCh. 6 - Prob. 2IPCh. 6 - Prob. 3IPCh. 6 - Prob. 4IPCh. 6 - Prob. 5IPCh. 6 - In 2004, Congress allocated over 20 billion to...Ch. 6 - In 2004, (Congress allocated over 20 billion to...Ch. 6 - Prob. 8IPCh. 6 - Prob. 9IPCh. 6 - Prob. 10IP
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- 5arrow_forwardLesson 5.10 - Price Discrimination is a price structure in which the seller charges different prices for the product it sells and the price differences do not reflect cost differences. 2. There are three types of price discrimination. price discrimination is a price structure in which the seller charges the highest price that each consumer is willing to pay for the product rather than go without it. price discrimination is a price structure in which the seller charges a uniform price per unit for one specific quantity, a lower price for an additional quantity, and so price discrimination is a price structure in which the seller charges different prices in different markets or charges different prices to various segments of the buying population. 3. Before a seller can price discriminate, certain conditions must be in place: on. a. The seller must be a price b. The seller must be able to 1. c. The possibility for higher price, cannot exist. prices. among customers who are willing to pay…arrow_forwardSuppose you can separate consumers into two groups: Group 1 has a price elasticity of demand = -4 and group 2 has a price elasticity of demand of -6. If you could conduct third degree price discrimination, which group would you charge a higher price to? Why? Suppose the the profit maximizing price for group 2 is $36. What price should I charge group 1? Show all your work.arrow_forward
- Suppose you can separate consumers into two groups: Group 1 has a price elasticity of demand = -3 and group 2 has a price elasticity of demand of -9. If you could conduct third-degree price discrimination, which group would you charge a higher price to? Why? What would be the relative price of group 1 to group 2? Suppose that the profit-maximizing price for group 2 is $12. What price should I charge group 1? Show all your work.arrow_forwardExplain the first degree of the price discrimination in the economy?arrow_forwardExplain the concept of black marketing as a direct consequence of price ceiling in economics?arrow_forward
- Write notes on Price Discrimination and Price Forcasting.arrow_forwardThe dilemma of price discrimination is that, for example in the case of ticket scalping, it transfers consumer surplus into producer surplus." Is it in society's best interest to allow the scalping of tickets? Explain. Why do the original ticket sellers refuse to price discriminate like the scalpers? Explain.arrow_forwardQUESTION 16 If the price of ground beef decreases, which of the following will occur? The demand curve for ground beef will shift to the left. The substitution effect will cause some consumers to switch to other types of meat. Consumers will experience a decrease in their purchasing power. There will be a movement down the demand curve for ground beef. QUESTION 17 Price discrimination is defined as: selling a product at the same price to each and every consumer selling a product at more than one price selling a product at its marginal cost plus a markup selling more than one version of a product producing goods and services for sale within the firm QUESTION 18 The demand function for Super Big Bright LED light bulbs is Qd = (45 million) - (3.5 million × P). If the company charged a price of $8 per bulb, how many will be demanded? 41.5 million 37 million 17 million 10 million QUESTION 19 If Goods X and Y are substitutes, if the price of Good X increases, this will cause a movement…arrow_forward
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