In observing how a firm behaves, you would know it were practicing Price Discrimination if it: Select one: a. only accepts credit or debit card payments. b. charges different prices to different customers even though the cost is the same to supply to each customer. c. asks personal questions about a customer's race, ethnicity, religion, or sexual orientation. d. charges customers more than they would prefer to pay.

In observing how a firm behaves, you would know it were practicing Price Discrimination if it: Select one: a. only accepts credit or debit card payments. b. charges different prices to different customers even though the cost is the same to supply to each customer. c. asks personal questions about a customer's race, ethnicity, religion, or sexual orientation. d. charges customers more than they would prefer to pay.

Essentials of Economics (MindTap Course List)

8th Edition

ISBN:9781337091992

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter14: Monopoly

Section: Chapter Questions

Problem 6PA

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How do I get the price elasticity number?? and how do I graph it? P Q Price Total Elasticity Revenue $9.00 1 - 9 $8.00 2 16 $7.00 3 21 $6.00 4 24 $5.00 5 25 $4.00 6 24 $3.00 7 21 $2.00 8 16
Nile.com, the online bookseller, wants to increase its total revenue. One strategy is to offer a 10% discount on every book it sells. Nile.com knows that its customers can be divided into two distinct groups according to their likely responses to the discount. The accompanying table shows how the two groups respond to the discount. Group A Group B(sales per week) (sales per week) Volume of sales beforethe 10% discount 1.55 million 1.50 million Volume of sales afterthe 10% discount 1.65 million 1.70 million A. Using the midpoint method, calculate the price elasticities of demand for group A and group B. B. Explain how the discount will affect total revenue from each group.C. Suppose Nile.com knows which group each customer belongs to when he or she logs on and can choose whether or not to offer the 10% discount. If Nile.com wants to increase its total revenue, should discounts be offered to group A or to group B, to neither group, or to both groups?
Nile.com, the online bookseller, wants to increase its total revenue. One strategy is to offer a 10% discount on every book it sells. Nile.com knows that its customers can be divided into two distinct groups according to their likely responses to the discount. The accompanying table shows how the two groups respond to the discount. Group A Group B(sales per week) (sales per week) Volume of sales beforethe 10% discount 1.55 million 1.50 million Volume of sales afterthe 10% discount 1.65 million 1.70 million A. Using the midpoint method, calculate the price elasticities of demand for group A and group B. B. Explain how the discount will affect total revenue from each group. C. Suppose Nile.com knows which group each customer belongs to when he or she logs on and can choose whether or not to offer the 10% discount. If Nile.com wants to increase its total revenue, should discounts be offered to group A or to group B, to neither group, or to both groups?
Logically Explain: (a) Which degree of price discrimination may cause favor for the consumer rather than producer? Explain it with the help of most appropriate example.
2. Suppose you are the manager of a local restaurant. Prior to COVID-19 you served an average of 300 meals a day at a price of $15. You are trying to stay open even though restaurants are limited to 50% capacity. To offset the reduced seating capacity you raised your price to $18 and are now serving 160 meals a day with both dine in and take out. Compute the Total Revenue for your restaurant at the $15 price and the total revenue at the new $18 price. Did your total revenue rise or fall? Use the mid-point formula to calculate the price elasticity of demand between these two price points. Does this represent Elastic or Inelastic demand? Finding it difficult the keep the restaurant open at 50% you consult with a local Economist who suggests that you should try reducing your prices to bring in more customers. You drop your price down to $16 and find that sales increased to 200 customers a day. Compute the Total Revenue for the restaurant at the new $16 price. How does this compare…
Suppose the following data represent the market demand for catfish: Price (per unit) $20 19 18 17 16 15 14 13 12 11Quantity demanded (units per day) 12 13 14 15 16 17 18 19 20 21Total revenue — — — — — — — — — —Marginal revenue — — — — — — — — — —Compute total and marginal revenue to complete the table above. At what rate of output is total revenue maximized? At what rate of output is MR less than price? At what rate of output does MR first become negative? Graph the demand and MR curves.
2. You are the Southeastern Michigan regional manager at Coca-Cola, responsible forproduction and pricing in the Metro Detroit area. Your primary competitor is Pepsi. The marketresearch team at Coca-Cola is thinking about launching a new product, Orange Vanilla Coke, toboost the brand. The cost function to produce a 12-pack of 12 fl. oz. cans of Orange VanillaCoke is C(qcoke) = 0.25qcoke and the market research team has estimated inverse market demandfor a 12-pack of this new “pop” in Southeastern Michigan to be P = 10.25 – 0.00025Q. a. Assuming Pepsi decides not to produce a similar product, allowing Coca-Cola to maintainmonopoly power in the market for orange vanilla cola, what price and quantity will youchoose to maximize profit? How much profit does Coca-Cola earn?b. What price and quantity you would choose to maximize profit if Pepsi spies discover yourproduct before launch, allowing Pepsi to produce and launch an identical product at the sametime. For your answer, assume the cost…
1) Surveys have shown that the majority of American consumers think that price discrimination - the practice of the same firm charging different prices to different consumers for the same good or service - is unfair and should be illegal. Do you think price discrimination is unfair? Do you think price discrimination should be illegal? Explain. 2) Suppose price discrimination were made illegal, but only for airlines, so airlines would have to charge all consumers the same price regardless of when they purchased the ticket. Who benefits as a result of this change? Who is made worse off as a result? Do you think society would be better or worse off as a result? Explain. 3) Think of a time where you bought something from a firm that was engaging in price discrimination. What was it? Do you think you paid a lower price or a higher price as a result of price discrimination? Do you think it is unfair that someone else is charged a different price than you were for the same good or service?…
Use the demand schedule to the upper right to calculate total revenue and marginal revenue at each quantity. Plot the demand, total-revenue, and marginal revenue curves and explain the relationships between them. Explain why the marginal revenue of the fourth unit of output is $3.50, even though its price is $5. Use Chapter 6’s total-revenue test for price elasticity to designate the elastic and inelastic segments of your graphed demand curve. What generalization can you make as to the relationship between marginal revenue and elasticity of demand? Suppose the marginal cost of successive units of output was zero. What output would the profit-seeking fifirm produce? Finally, use your analysis to explain why a monopolist would never produce in the inelastic region of demand.
3. Suppose the movie theater has two types of customers: college students and senior citizens. Collegestudents have a willingness to pay $20 and senior citizens have a willingness to pay $5. The theaterpotentially has 10 college students and 20 senior citizen customers. The movie theater incurs no costwhen showing the movie, so profit is the same as revenue. How does total surplus change if themovie theater goes from charging a single price to perfectly price discriminating?
Also explain why a monopoly firm, choose not to produce at its full capacity? How does monopoly affect society’s well-being? What is price discrimination and how it helps the firm and the consumers