Question

What are the conditions necessary for a firm to be able to price-discriminate in two markets?...

What are the conditions necessary for a firm to be able to price-discriminate in two markets? Identify different degrees of price discrimination.

Business   Economics   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

Necessary condition for price discrimination are

- Market power

- no arbitrage or reselling is allowed

- market should be segmented/separated

- market should have different elasticity of demand

There are three type of price discrimination

first degree ya perfect price discrimination is when seller charges each consumer equal to their maximum willingness to pay

second degree price discrimination When consume discriminates on the basis of number of quantities sold

and third degree price discrimination when consumer charges different price due to geopgraphical difference, different time period or due to all other left reason like personal

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
Define price discrimination. What is necessary in order to effectively price discriminate.
Define price discrimination. What is necessary in order to effectively price discriminate.
What conditions are necessary if a firm wishes to engage in perfect/first-degree price discrimination?
What conditions are necessary if a firm wishes to engage in perfect/first-degree price discrimination?
(a)    A firm wishes to third degree price discriminate to meet competition in two markets...
(a)    A firm wishes to third degree price discriminate to meet competition in two markets A and B. The firm’s total cost schedule is TC = $10*QA + $25*QB. Demands in the two markets are QA = 4,000*PA-1.5 and QB = 100,000*PA-2. The profit-maximizing prices to charge in markets A and B are: A         $20, $30.                     B.             $30, $50.                     C.             $40, $50                      D.             $60, $80                      E. None of the above. (b) Refer...
Assume a monopolist is able to practice price discrimination in two separate markets. Each market has...
Assume a monopolist is able to practice price discrimination in two separate markets. Each market has a different demand curve for the monopolist’s product: Q1 = 1000 – 4P (Market 1: Maine) Q2 = 1200 – 4P (Market 2: Texas) Let the short-run total cost function for the monopolist be SRTC = 100 + 0.25Q2 a. Find the quantity and price at which the monopolist will sell in each market, and figure out the firm’s total profits from the combined...
Discuss and illustrate with a graph third degree price discrimination. What conditions are necessary and how...
Discuss and illustrate with a graph third degree price discrimination. What conditions are necessary and how would we expect it to affect the profits of the firm?
2. Suppose that there is a firm that sells the same good in two different markets...
2. Suppose that there is a firm that sells the same good in two different markets and that it is able to prevent resale from the lower priced market to the higher priced market. The direct demand functions for the two markets are given by the following two equations: Q1 = 8- P1 Q2= 12- P2 Also, the firm produces this good in one plant, so the Total Cost function is given by the following equation: TC = 5 +...
Which of the following conditions must be true so that a firm can price discriminate? A....
Which of the following conditions must be true so that a firm can price discriminate? A. There are no other firms in the market. B. The good is a non-durable. C. The good cannot be easily resold. D. All of the above must be true.
A firm is selling its product in two markets. In market A the demand is given...
A firm is selling its product in two markets. In market A the demand is given by QA = 100 − 2P and in market B the demand is QB = 80 − 4P. The firm’s total cost is C = 10Q where Q = QA + QB is the total output. a) Suppose the monopolist cannot discriminate between markets A and B. What is the total demand ? (1 pt) Find the profit-maximizing price and quantity (2 pt), and...
Explain how a monopolist can increase profits by price discriminating. What are the conditions necessary for...
Explain how a monopolist can increase profits by price discriminating. What are the conditions necessary for price discrimination
6. Calculate (a) the monopoly price, quantity, and profit for a firm facing a demand curve...
6. Calculate (a) the monopoly price, quantity, and profit for a firm facing a demand curve (1 pt) Q = 400 – 4P with constant MC = 40 Hint: Remember we use “inverse” demand curve where P(Q) to use the twice as steeply sloped rule. b) Now write out the 3 conditions necessary for a monopolist to be able to price discriminate. (1 pt) c) Consider a monopolist who can use 3rd degree price discrimination by separating the above demand...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT