For each of the following examples, explain how and why a monopoly would try to price discriminate. a) Air transport for business people and tourists b) Serving food on weekdays to business people and retired people. (Hint: Which group has more flexibility during a weekday to adjust to a price change and, a higher price elasticity of demand ?) c) A theater that shows the same movie to a large families and to individuals and couples. (Hint: For which set of people will the overall expense of a movie be a larger part of their budget, so that demand is relatively more elastic?) Concept introduction: Price discrimination Price discrimination implies charging different price from different customers for the same product or service.

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Answer 1

Question

Chapter 24, Problem 8P

To determine

For each of the following examples, explain how and why a monopoly would try to price discriminate.

a) Air transport for business people and tourists

b) Serving food on weekdays to business people and retired people. (Hint: Which group has more flexibility during a weekday to adjust to a price change and, a higher price elasticity of demand?)

c) A theater that shows the same movie to a large families and to individuals and couples. (Hint: For which set of people will the overall expense of a movie be a larger part of their budget, so that demand is relatively more elastic?)

Concept introduction:

Price discrimination

Price discrimination implies charging different price from different customers for the same product or service.

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Answer 2

Question

Chapter 24, Problem 8P

To determine

For each of the following examples, explain how and why a monopoly would try to price discriminate.

a) Air transport for business people and tourists

b) Serving food on weekdays to business people and retired people. (Hint: Which group has more flexibility during a weekday to adjust to a price change and, a higher price elasticity of demand?)

c) A theater that shows the same movie to a large families and to individuals and couples. (Hint: For which set of people will the overall expense of a movie be a larger part of their budget, so that demand is relatively more elastic?)

Concept introduction:

Price discrimination

Price discrimination implies charging different price from different customers for the same product or service.

Expert Solution & Answer

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Answer 3

Question

Chapter 24, Problem 8P

To determine

For each of the following examples, explain how and why a monopoly would try to price discriminate.

a) Air transport for business people and tourists

b) Serving food on weekdays to business people and retired people. (Hint: Which group has more flexibility during a weekday to adjust to a price change and, a higher price elasticity of demand?)

c) A theater that shows the same movie to a large families and to individuals and couples. (Hint: For which set of people will the overall expense of a movie be a larger part of their budget, so that demand is relatively more elastic?)

Concept introduction:

Price discrimination

Price discrimination implies charging different price from different customers for the same product or service.

Expert Solution & Answer

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Answer 4

Question

Chapter 24, Problem 8P

To determine

For each of the following examples, explain how and why a monopoly would try to price discriminate.

a) Air transport for business people and tourists

b) Serving food on weekdays to business people and retired people. (Hint: Which group has more flexibility during a weekday to adjust to a price change and, a higher price elasticity of demand?)

c) A theater that shows the same movie to a large families and to individuals and couples. (Hint: For which set of people will the overall expense of a movie be a larger part of their budget, so that demand is relatively more elastic?)

Concept introduction:

Price discrimination

Price discrimination implies charging different price from different customers for the same product or service.

Expert Solution & Answer

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Answer 5

Chapter 24, Problem 8P

To determine

For each of the following examples, explain how and why a monopoly would try to price discriminate.

a) Air transport for business people and tourists

b) Serving food on weekdays to business people and retired people. (Hint: Which group has more flexibility during a weekday to adjust to a price change and, a higher price elasticity of demand?)

c) A theater that shows the same movie to a large families and to individuals and couples. (Hint: For which set of people will the overall expense of a movie be a larger part of their budget, so that demand is relatively more elastic?)

Concept introduction:

Price discrimination

Price discrimination implies charging different price from different customers for the same product or service.

Answer 6

Chapter 24, Problem 8P

To determine

For each of the following examples, explain how and why a monopoly would try to price discriminate.

a) Air transport for business people and tourists

b) Serving food on weekdays to business people and retired people. (Hint: Which group has more flexibility during a weekday to adjust to a price change and, a higher price elasticity of demand?)

c) A theater that shows the same movie to a large families and to individuals and couples. (Hint: For which set of people will the overall expense of a movie be a larger part of their budget, so that demand is relatively more elastic?)

Concept introduction:

Price discrimination

Price discrimination implies charging different price from different customers for the same product or service.

Answer 7

Chapter 24, Problem 8P

To determine

For each of the following examples, explain how and why a monopoly would try to price discriminate.

a) Air transport for business people and tourists

b) Serving food on weekdays to business people and retired people. (Hint: Which group has more flexibility during a weekday to adjust to a price change and, a higher price elasticity of demand?)

c) A theater that shows the same movie to a large families and to individuals and couples. (Hint: For which set of people will the overall expense of a movie be a larger part of their budget, so that demand is relatively more elastic?)

Concept introduction:

Price discrimination

Price discrimination implies charging different price from different customers for the same product or service.

Answer 8

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Answer 9

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Answer 10

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Answer 11

Ch. 24 - Prob. 24.1LO Ch. 24 - Prob. 24.2LO Ch. 24 - Prob. 24.3LO Ch. 24 - Prob. 24.4LO Ch. 24 - Prob. 24.5LO Ch. 24 - Prob. 24.1SC Ch. 24 - Prob. 24.2SC Ch. 24 - Prob. 24.3SC Ch. 24 - Prob. 24.4SC Ch. 24 - Prob. 24.5SC

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Chapter 24 Solutions