Principles of Microeconomics
Solutions
Principles of Microeconomics
Give two examples of price discrimination. In each case, explain why the monopolist chooses to follow this business strategy.
One example of price discrimination is publishing books, where the publishers will charge higher price for hardback books and lower price for paperback books. This is because the cost of production of hardback books is higher than the paperback books. Publishers implement this pricing strategy to cater the demand of two segments of customer groups. When the book is first released, the die-hard fans are likely to pay more for a hardback book; meanwhile, the ...
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