EBK PRINCIPLES OF MICROECONOMICS (SECON
2nd Edition
ISBN: 9780393616149
Author: Mateer
Publisher: W.W.NORTON+CO. (CC)
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Chapter 11, Problem 5SP
To determine
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Price discrimination is one of the major issues around the world and it will remain for coming years as well. the incentives towards price discrimination and the ability to price discrimination will be growing in the coming years as sellers will be increasingly tempted to engage in differential pricing. according to price discrimination theory, prices are expected to vary in response to differences in demand in different markets (third-degree price discrimination) or charges different price for different quantity of product (second-degree price discrimination). sellers are always tracking every moments of their customers to best fit their needs or to attract them to their products in the form of loyalty card, coupons, store credit card and many other forms incentives. price discrimination is, harmful to society when it leads to a misdistribution of resources meanwhile employment and income are not maximised. price discrimination is, however, also beneficial to society for it helps in…
Explain the concept of black marketing as a direct consequence of price ceiling in economics?
• Provide an example of price discrimination from your own experience or from your work. Is this an example of first-degree, second-degree, or third degree price discrimination?
• Describe the conditions that allow the firm to price discriminate in your example.
• How does this practice affect the firm and its consumers?
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EBK PRINCIPLES OF MICROECONOMICS (SECON
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- Complete the following table by indicating whether or not each scenario is an example of price discrimination. Hint: To determine whether a scenario is an example of price discrimination, think about whether the market can be segmented into two groups that pay different prices for the same good. Scenario Price Discrimination Yes No The price of a gallon of gas at a SwellGas station in the center of a densely populated suburban area is $3.89 per gallon, but the price of a gallon of gas at the SwellGas station at a rest area right off the highway is $4.65 per gallon. A local boutique is having a sale on sweaters, but customers are not aware of the sale until they are already in the store. In other words, there is no advertising of the sale other than signs in the back of the store that cannot be seen from the outside. All sweaters are marked as 25% off.arrow_forwardYou and your friend who just graduated visit a local ice cream parlor. By showing your student id you are able to buy an ice cream cone for $1 cheaper than your friend. What type of price discrimination is this an example of? A. First-degree price discrimination B. Second-degree price discrimination C. Third-degree price discrimination D. Fourth-degree price discriminationarrow_forwardWhich of the following is true for a monopolist that engages in perfect price discrimination? a. There is more consumer surplus than exists with a regular monopoly. b. The firm sells the profit-maximizing quantity of the regular monopolist but charges each consumer a price higher than the regular monopoly price. c. The monopolist sells the allocatively efficient quantity of output. d. The monopolist further restricts output compared to the regular monopoly, creating greater deadweight loss. e. The monopolist no longer faces a downward-sloping demand curve, becoming a price taker.arrow_forward
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