Intel offers baseline processors as well as higher end versions of the exact same processors. The higher end versions are priced considerably higher and have additional features that the baseline versions do not have, but the marginal cost of producing both processors is virtually identical. This situation is an example of what kind of price discrimination? OA) Second Degree B) Third Degree C) First Degree D) Two-Part Tariff
Q: Which case below best represents a case of price discrimination? An insurance company offers…
A: First-degree discrimination, or best or perfect discrimination of price, happens when a business…
Q: Perfect price discrimination consists of basing price on the highest marginal cost the customer is…
A: "Since you have asked multiple questions, we will solve the first question for you. If you want any…
Q: annel N T ney Channel Subscriber per Month $6.15 $1.52 $1.25 Price Elasticity of Demand -1.8 -2.1…
A: In economics, elasticity calculated the % change of one economic variable in response to a % change…
Q: The following are the necessary conditions which must be fulfilled for the implementation of price…
A: Price discrimination: It is a selling methodology that charges the client’s various costs for a…
Q: Which of the following formula is applicable for a monopolist purchasing input in a competitive…
A: Under the monopolist market structure, a large size would provide an advantage. In the monopoly…
Q: - Perfect price discrimination a. rarely occurs because firms do not have sufficient power to…
A: The price discrimination would result in the monopoly charging of different prices from the…
Q: In third-degree price discrimination, consumer groups with the largest price elasticity of demand…
A: In a market, the third degree price discrimination refers to the pricing strategy if the firm…
Q: If a monopoly firm successfully implements perfect price discrimination, the value of consumer…
A: A monopoly is when one business holds a dominant position in an industry or area to the point where…
Q: in both cities; and (11) third-degree price discrimination. difference in profits between these two…
A: A monopolist firm setting two different price level in two cities A and B with respective demand…
Q: 37. Whistler, a pharmaceutical company, has recently been the only company to deliver a…
A: Price discrimination refers to the strategy of offering the same product at different prices from…
Q: When a firm sells the same product to different consumers and charges the consumers different…
A: A firm may sell the same product but charge different prices to different consumers for the same…
Q: Microsoft selling Excel and Word together while allowing customers to buy the two products…
A: There two products by a single firm and firm can sell them together or separately.
Q: train operating companies have the option of buying first class or standard tickets, with first…
A: Price Discrimination is when deals of indistinguishable labor and products are given at various…
Q: A monopolist that engages in perfect price discrimination: a. divides all buyers into two…
A: Answer :- Option d. Charges a different price for every unit sold.
Q: Multichoice company broadcasts to subscribers in Lusaka and Solwezi. The demand for each of these…
A: GIVEN DATA The demand for each of these two groups are QSZ = 50 – (1/3) PSZ QLSK = 80 – (2/3)…
Q: Sport facilities sell tickets according to a seating map. At the Roger Centre, Blue Jays fans can…
A: Dear student, you have asked multiple questions in a single post. In such a case, I will be…
Q: Identify and describe at least 2 direct price discrimination and 2 indirect price discrimination…
A: Meaning of Price Discrimination: The term price discrimination refers to the situation under which…
Q: Consumers with a high willingness to pay enjoy more surplus under a single-price monopoly. are…
A: Consumer with high willingness to pay - enjoy more surplus under first degree discrimination
Q: Price discrimination is not possible in case of
A: Price discrimination is not possible in case of which competition:
Q: Compare first, second and third-degree price discrimination in terms of (1) potential firm…
A:
Q: Which of these statements is most CORRECT about real world pricing strategies? Select one: a. Two…
A: Pricing strategies are important to decide on the revenue of the firm. Strategies are important as…
Q: If a firm can observe a buyer's characteristics then it can charge different prices as a function of…
A: The measure that depicts charging customers different prices for the same goods and services being…
Q: Perfect price discrimination consists of charging each customer the lowest price they are willing to…
A: Answer: Correct option: option 4 (charging each consumer their reservation price) Explanation:…
Q: Which of the following statements is an accurate interpretation of the graph? This firm engages in…
A: The price discrimination would result in the strategy of the monopoly which would result in the…
Q: using relevant examples distinguish among the three forms of price discrimination.
A: Price discrimination: Discriminating monopoly’ or ‘price discrimination’ occurs when a monopolist…
Q: Describe optimality condition for third-degree price discrimination based on : "MRT (QT) = MC(Q1) =…
A: 3rd degree price discrimination 3rd degree price discrimination occurs when different groups of…
Q: Which of the following statements is false? Quantity discounts is the same as second-degree price…
A: Price discrimination means charging different price for the same good . There are three degree of…
Q: Two curves that remain parallel as the quantity of output increases are:. Single choice. Total…
A: Two curves that remain parallel as the quantity of output increases are total cost and total…
Q: Total consumers can be divided into Group A and Group B, and it is assumed that a monopoly company…
A: Price discrimination refers to the situation when the producer charges different prices from the…
Q: is the practice of charging different customers different prices for the same item. Price…
A: 1. It is the price segmentation where different prices are charged form different consumers for the…
Q: The deadweight loss generated by a first-degree price discrimination O equals the deadweight loss of…
A: There is no deadweight loss, while there's not consumer surplus (A, which was extracted by the…
Q: Third degree price discrimination refers to: a. selling the same product to different consumers at…
A: Third-degree price discrimination entails having the ability to differentiate between different…
Q: Given: Marginal Cost = $6 Own-price Elasticity of Demand for Market Segment # 1 -2 What would be the…
A: MC = $6 and elaticity = -2
Q: Summarize the Airline Industry in term of the Price Discrimination.
A: Price discrimination is indeed a pricing strategy in which businesses charge customers varying rates…
Q: Would producer surplus with second-degree price discrimination not below a single price.
A: In the monopoly market, Monopolist uses price discrimination strategy in three ways.
Q: Use the figure below with perfect price discrimination, the firm will produce and sell: Price per…
A: Price discrimination is the practice by monopolists to charge different prices from different…
Q: Which of the following conditions must occur for the direct price discrimination to be successful?…
A: Answer: Price discrimination refers to charging different prices from different groups of consumers.…
Q: Which of the following is not true of successful price discriminators? a. They could make greater…
A: A price discriminator is the one who can charge different price from different consumers for the…
Q: The quantity sold by a monopolist using first degree price discrimination is higher than the…
A: Financial analysts have distinguished three conditions that should be met for value segregation to…
Q: . Price discrimination is not possible in case of
A: Given Markets structure Perfect competition is the market which has n numeri of buyers and sellers…
Q: Price Discrimination 1) To be able to price discriminate, a firm must A) lower prices for all…
A: Price discrimination it is a practice of charging different price to different types of consumers.
Q: The market demand, submarket demands (submarket 1 (Qd1); submarket 2 (Qd2)), and total cost…
A:
Q: Which of the following is NOT an example of price discrimination? All of the above are examples of…
A: A perfectly competitive market is the market structure where there are many sellers selling…
Q: Under third-degree price discrimination, as the number of customer groups facing different prices…
A: Price discrimination refers to the practice of charging a different price from different consumers…
Q: Discuss to what extent you agree with the following statements Price discrimination is beneficial…
A: Price discrimination: - it is practice of charging different prices from different consumers for…
Q: To practice price discrimination, a firm must meet each of the conditions listed below, except…
A: Price: It refers to the cost of the goods and services that is available with the public. The…
Trending now
This is a popular solution!
Step by step
Solved in 3 steps with 2 images
- Price matching is a strategic move that A- seeks to make cheating unprofitable. B- must generally be announced publicly in order to have the desired effect. C- has no usefulness to managers if a simultaneous pricing decision is going to be made only one time. D- both a and b E- all of the aboveMARKET SEGMENTATION: Type III Discrimination: Price per customer segmentA company has differentiated its customers into 2 segments between which arbitrage is not possible, arriving at following result: Q1 = 200 - P and Q2 = 180 - 1.5 P. Its MC is constant and equal to 70. Commercial Strategy Manager wants to know:(a) If it is convenient for it to apply type III price discrimination, compared to that which would be obtained with the application of a single price for all units, in terms of extraordinary profit.b) If it applies type III price discrimination, what is market power it has in each segment.c) What is price elasticity of demand in each segment, at respective break-even points.he Pear Computer Company just developed a totally revolutionary new personal computer. Pear estimates that it will take competitors at least two years to produce equivalent products. The demand function for the computer is estimated to be P=2,500−500Q�=2,500−500� where Q� is millions of computers. The marginal (and average variable) cost of producing the computer is $900. Assuming Pear acts as a monopolist in its market, the profit-maximizing price and output levels are per computer and million computers, respectively. The total contribution to profits and fixed costs at this output level is million. Pear Computer is considering an alternative pricing strategy of price skimming. It plans to set the following schedule of prices over the coming two years: Complete the following table by calculating the contribution to profit and overhead for each of the 10 time periods and prices. Time Period Price Quantity Sold Total Contribution ($) (Million)…
- A manager of a nightclub realizes that demand for drinks is more elastic among students and is trying to determine the optimal pricing schedule. Specifically, he estimates the following average demand for his customer types: Under 25: qr =18-5p Over 25: q=10-2p The two age groups visit the nightclub in equal numbers on average. Assume that drinks cost the club $2 to make. If the manager can charge a separate entry fee and a price per drink for each group, what two-part price will the manager set for reach group. Now suppose that once again it is impossible to identify which group the customers belong. Suppose the manager lowers the price of drinks to equal to marginal cost and still wanted to attract both customers, what entry fee would the manager set? Compare the profits earned in parts a) to d). Which scheme would you choose if you could not identify customer type and which would you choose if you could identify customer type.EasyTax markets both a deluxe and a standard version of its software. The deluxe version contains additional features that are likely to appeal to sophisticated users. The marginal costs of producing and distributing the two versions are virtually equal, and equal to zero. The market is equally divided into two types of users, sophisticated and unsophisticated (and assume one user of each type). The maximum willingness to pay for both types of users for the standard and deluxe versions are given in the following table: Standard Deluxe Unsophisticated 20 20 Sophisticated 35 100 (a) Assuming that the company producing EasyTax can distinguish between sophisticated and unsophisticated users (because, for instance, the sophisticated users are registered accountants), what are the optimal prices to be charged to each category of users? What is the company’s profit? (b) Assume now that the company cannot distinguish between the two types of user.…Based on the best available econometric estimates, the market elasticity of demand for your firm’s product is −3. The marginal cost of producing the product is constant at $100, while average total cost at current production levels is $175.Determine your optimal per unit price if:Instructions: Enter your responses rounded to two decimal places.a. you are a monopolist.
- LalaFast 21 is a major carrier based in the Philippines and has made a strategy of cutting fares drastically on certain routes with large effects on traffic in those markets. For example, on the Baguio-Cubao route the entry of LalaFast into the market caused average fares to fall by 48 per cent and increased market revenue from P21,327,008 to P47,064,782 annually. On the Tuguegarao-Caloocan route, however, the average fare cut in the market when LalaFaST entered was 70 per cent and market revenue fell from an annual P66,201,553 to P33,101,514.Questions1. Calculate the PEDs for the Baguio-Cubao route and Tuguegarao-Caloocan route.2. Explain why the above market elasticities might not apply specifically to Lalafast 21.3. If LalaFast 21 does experience a highly elastic demand on the Baguio-Cubao route, what is the profit implication of this?4. Explain why the fare reduction on the Tuguegarao-Caloocan route a profitable strategy for LalaFast may still be.Based on the best available econometric estimates, the market elasticity of demand for your firm’s product is –2. The marginal cost of producing the product is constant at $150, while average total cost at current production levels is $225.Determine your optimal per unit price if:Instructions: Enter your responses rounded to two decimal places.a. You are a monopolist.$ b. You compete against one other firm in a Cournot oligopoly.$ c. You compete against 19 other firms in a Cournot oligopoly.$Baker Enterprises operates a midsized company that specializes in the production of a unique type of memory chip. It is currently the only firm in the market, and it earns $10 million per year by charging the monopoly price of $115 per chip. Baker is concerned that a new firm might soon attempt to clone its product. If successful, this would reduce Baker’s profit to $4 million per year. Estimates indicate that, if Baker increases its output to 280,000 units (which would lower its price to $100 per chip), the entrant will stay out of the market and Baker will earn profits of $8 million per year for the indefinite future. 1. What must Baker do to credibly deter entry by limit pricing? 2. Does it make sense for Baker to limit price if the interest rate is 10 percent?
- A cruise ship company offers two packages to its clients: an “economy” package and a “deluxe” package with more amenities to its higher-paying customers. The company estimates that its customers have the following demand functions: Economy package: Q(E) = 20,000 - 10PE Deluxe package: Q(D) = 5900 - 1.5PD The costs for the two services (as a function of the number of passengers) are: Economy passenger: C(QE) = 5000 + 100QE + 0.1Q^2E Deluxe passenger: C(QD) = 5000 + 200QD + 6Q^2D What prices should the company set for the economy and deluxe packages? What are the number of passengers that the ship will have in each package, and how much profit does the company make per cruise? Now assume the ship has a maximum capacity of 4,000 people. How many spaces should be arranged for deluxe passengers and how many for economy? What prices should the company set for the two packages? What is the profit for the company now?The Pear Computer Company just developed a totally revolutionary new personal computer. Pear estimates that it will take competitors at least two years to produce equivalent products. The demand function for the computer is estimated to be P=2,500-500Q where QQ is millions of computers. The marginal (and average variable) cost of producing the computer is $900. Assuming Pear acts as a monopolist in its market, the profit-maximizing price and output levels are $ per computer and million computers, respectively. The total contribution to profits and fixed costs at this output level is $ million. Time Period Price Units sold Total Contri. 1 2,400 2 2,200 3 2,000 4 1,800 5 1,700 6 1,600 7 1,500 8 1,400 9 1,300 10 1,200 Over the 10 periods, the total contribution to profits and fixed costs from price skimming is $…Based on the best available econometric estimates, the market elasticity of demand for your firm’s product is −2.5. The marginal cost of producing the product is constant at $225, while average total cost at current production levels is $300.Determine your optimal per unit price if:Instructions: Enter your responses rounded to two decimal places.a. you are a monopolist. $ b. you compete against one other firm in a Cournot oligopoly. $ c. you compete against 19 other firms in a Cournot oligopoly. $ Note:- Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism. Answer completely. You will get up vote for sure.