Question 11: Consider the information of a firm below in answering the succeeding question regarding the three different varieties of price discrimination. Scenario 8: Firms with market power find it profitable to sell the same product to different consumers or groups of consumers at different prices. This practice is called price discrimination. Price discrimination occurs only when price differences are based on different buyers' valuations of the same product. If price differences are based on cost differences, they are not discriminatory. Firm A: A local supermarket called "Discount Warriors" sells all your daily grocery needs under one roof. "Discount Warriors" is known in their community for the great discount deals t they offer. The newest deal states that shoppers can buy six bottles of red wine, valued at R50 per bottle, for only R200.00. Shoppers, however, need to purchase six bottles of wine or pay the original R50 per bottle if they decide to purchase less than six bottles. For scenario 8, answer the following questions: 11.1 Given the information for firm A, answer the following questions: 11.1.1 Identify and define the type of price discrimination undertaken by firm A 1.1.1.2 Substantiate your answer for (11.1.1.) with reference to the provided extract a and appropriate economic theory.I
Question 11: Consider the information of a firm below in answering the succeeding question regarding the three different varieties of price discrimination. Scenario 8: Firms with market power find it profitable to sell the same product to different consumers or groups of consumers at different prices. This practice is called price discrimination. Price discrimination occurs only when price differences are based on different buyers' valuations of the same product. If price differences are based on cost differences, they are not discriminatory. Firm A: A local supermarket called "Discount Warriors" sells all your daily grocery needs under one roof. "Discount Warriors" is known in their community for the great discount deals t they offer. The newest deal states that shoppers can buy six bottles of red wine, valued at R50 per bottle, for only R200.00. Shoppers, however, need to purchase six bottles of wine or pay the original R50 per bottle if they decide to purchase less than six bottles. For scenario 8, answer the following questions: 11.1 Given the information for firm A, answer the following questions: 11.1.1 Identify and define the type of price discrimination undertaken by firm A 1.1.1.2 Substantiate your answer for (11.1.1.) with reference to the provided extract a and appropriate economic theory.I
Economics: Private and Public Choice (MindTap Course List)
16th Edition
ISBN:9781305506725
Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Publisher:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Chapter24: Price-searcher Markets With High Entry Barriers
Section: Chapter Questions
Problem 13CQ
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Transcribed Image Text:Question 11:
Consider the information of a firm below in answering the succeeding question regarding the three
different varieties of price discrimination.
Scenario 8:
Firms with market power find it profitable to sell the same product to different consumers or groups of
consumers at different prices. This practice is called price discrimination. Price discrimination occurs only
when price differences are based on different buyers' valuations of the same product. If price differences
are based on cost differences, they are not discriminatory.
Firm A:
A local supermarket called "Discount Warriors" sells all your daily grocery needs under one roof. "Discount
Warriors" is known in their community for the great discount dealst they offer.
The newest deal states that shoppers can buy six bottles of red wine, valued at R50 per bottle, for only
R200.00. Shoppers, however, need to purchase six bottles of wine or pay the original R50 per bottle if they
decide to purchase less than six bottles.
For scenario 8, answer the following questions:
11.1 Given the information for firm A, answer the following questions:
11.1.1 Identify and define the type of price discrimination undertaken by firm A
1.1.1.2 Substantiate your answer for (11.1.1.) with reference to the provided extract a and appropriate
economic theory.[
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