a)
The case of
a)
Answer to Problem 2CYU
Not a case of price discrimination.
Explanation of Solution
Damaged merchandise is marked is not the case of price discrimination because all customer value the damaged merchandise less than the undamaged merchandise irrespective of
When monopolists sell the same good to a different customer for a different price then it is called price discrimination. A low price is charged in case of a high
b)
The case of price discrimination.
b)
Answer to Problem 2CYU
A case of price discrimination and consumers with a high price elasticity of
Explanation of Solution
Hotels have senior citizen discounts is a case of price discrimination and consumer with high price elasticity of demand because a low price is charged from a group that is senior citizen group for the same service and if they are not charged a low price they do not come since their attendance is very less in hotels.
When monopolists sell the same good to a different customer for different prices then it is called price discrimination. A low price is charged in case of a high price elasticity of demand and a high price is charged in case of a low-price elasticity of demand.
c)
The case of price discrimination.
c)
Answer to Problem 2CYU
Food manufacturers placing discount coupons for their merchandise in the newspaper is a case of price discrimination and a discount coupon is distributed to the consumer with high price elasticity of demand.
Explanation of Solution
Food manufacturer placing discount coupon for their merchandise in the newspaper is a case of price discrimination discount coupon is distributed to the consumer with high price elasticity of demand because monopolist charge lower price with discount coupon and these coupons are used by those who cannot afford the real price and after getting the discount coupon, they will demand the goods.
Price discrimination monopolist charges a different price for the same good from a different group of consumers according to the willingness to pay of customers. In a price-discriminating
d)
The case of price discrimination.
d)
Answer to Problem 2CYU
Airline tickets cost more during the summer peak flying period is a case of price discrimination and consumers with a low-price elasticity of demand.
Explanation of Solution
Airline tickets cost more during the summer peak flying period is a case of price discrimination and consumers with a low-price elasticity of demand because monopolist charges a different price in different season. During the non-peak season, the consumer’s price elasticity of demand is high and during the peak season, the consumer price elasticity of demand is low because the consumer is ready to pay the high price during the peak season.
When monopolists sell the same good to a different customer for a different price then it is called price discrimination. A low price is charged during non-peak season and a high price is charged during peak season.
Chapter 63 Solutions
Krugman's Economics For The Ap® Course
- Suppose the exchange rate between the British pound and the U.S. dollar is £1 = $2.00. The U.S. government implementsU.S. government implements a contractionary fiscal policya contractionary fiscal policy. Illustrate the impact of this change in the market for pounds. 1.) Using the line drawing tool, draw and label a new demand line. 2.) Using the line drawing tool, draw and label a new supply line. Note: Carefully follow the instructions above and only draw the required objects.arrow_forwardJust Part D please, this is for environmental economicsarrow_forward3. Consider a single firm that manufactures chemicals and generates pollution through its emissions E. Researchers have estimated the MDF and MAC curves for the emissions to be the following: MDF = 4E and MAC = 125 – E Policymakers have decided to implement an emissions tax to control pollution. They are aware that a constant per-unit tax of $100 is an efficient policy. Yet they are also aware that this policy is not politically feasible because of the large tax burden it places on the firm. As a result, policymakers propose a two- part tax: a per unit tax of $75 for the first 15 units of emissions an increase in the per unit tax to $100 for all further units of emissions With an emissions tax, what is the general condition that determines how much pollution the regulated party will emit? What is the efficient level of emissions given the above MDF and MAC curves? What are the firm's total tax payments under the constant $100 per-unit tax? What is the firm's total cost of compliance…arrow_forward
- 2. Answer the following questions as they relate to a fishery: Why is the maximum sustainable yield not necessarily the optimal sustainable yield? Does the same intuition apply to Nathaniel's decision of when to cut his trees? What condition will hold at the equilibrium level of fishing in an open-access fishery? Use a graph to explain your answer, and show the level of fishing effort. Would this same condition hold if there was only one boat in the fishery? If not, what condition will hold, and why is it different? Use the same graph to show the single boat's level of effort. Suppose you are given authority to solve the open-access problem in the fishery. What is the key problem that you must address with your policy?arrow_forward1. Repeated rounds of negotiation exacerbate the incentive to free-ride that exists for nations considering the ratification of international environmental agreements.arrow_forwardFor environmental Economics, A-C Pleasearrow_forward
- True/ False/ Undetermined - Environmental Economics 3. When the MAC is known but there is uncertainty about the MDF, an emissions quota leads to a lower deadweight loss associated with this uncertainty.arrow_forwardTrue/False/U- Environmental Economics 2. The discount rate used in climate integrated assessment models is the key driver of the intensity of emissions reductions associated with optimal climate policy in the model.arrow_forwardAt the beginning of the year, the market for portable electric fans was in equilibrium. In June, a summer heat wave hit. What effect does the heat wave have on the market for fans? Drag the appropriate part(s) of the graph to show the effect on the market for portable fans. To refer to the graphing tutorial for this question type, please click here. Price 17 OF 21 QUESTIONS COMPLETED f4 Q Search f5 f6 f7 CO hp fg 6 M366 W ins f12 f11 f10 SUBMIT ANSWER ENG 4xarrow_forward
- In the context of investment risk, what does "diversification" mean? A) Spreading investments across various assets to reduce riskB) Investing in a single asset to maximize returnsC) Increasing investment in high-risk assetsD) Reducing the number of investments to focus on high-performing onesarrow_forwardAt the 8:10 café, there are equal numbers of two types of customers with the following values. The café owner cannot distinguish between the two types of students because many students without early classes arrive early anyway (that is she cannot price discriminate). Students with early classes Students without early classes Coffee 70 60 Banana 50 100 The MC of coffee is 10. The MC of a banana is 40. Is bundling more profitable than selling separately? HINT: if you sell the bundle, can you make more by offering coffee separately? If so, what price should be charged for the bundle? (Show calculations)arrow_forwardYour marketing department has identified the following customer demographics in the following table. Construct a demand curve and determine the profit maximizing price as well as the expected profit if MC=$1. The number of customers in the target population is 10,000. Use the following demand data: Group Value Frequency Baby boomers $5 20% Generation X $4 10% Generation Y $3 10% `Tweeners $2 10% Seniors $2 10% Others $0 40%arrow_forward
Principles of Economics (12th Edition)EconomicsISBN:9780134078779Author:Karl E. Case, Ray C. Fair, Sharon E. OsterPublisher:PEARSON
Engineering Economy (17th Edition)EconomicsISBN:9780134870069Author:William G. Sullivan, Elin M. Wicks, C. Patrick KoellingPublisher:PEARSON
Principles of Economics (MindTap Course List)EconomicsISBN:9781305585126Author:N. Gregory MankiwPublisher:Cengage Learning
Managerial Economics: A Problem Solving ApproachEconomicsISBN:9781337106665Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike ShorPublisher:Cengage Learning
Managerial Economics & Business Strategy (Mcgraw-...EconomicsISBN:9781259290619Author:Michael Baye, Jeff PrincePublisher:McGraw-Hill Education