Provide a thorough discussion of the following specific issues asked. Define and explain third-degree Price Discrimination;...

Provide a thorough discussion of the following specific issues asked.

Define and explain third-degree Price Discrimination;
Demonstrate that in order to achieve optimal third-degree price discrimination, marginal revenue for each consumer group must be equal to marginal cost;
By using the condition in subpart 2, demonstrate how the firm carrying out the third-degree price discrimination, should change its prices and total output if the demand curve for one consumer group shifts outward, causing marginal revenue for that group to increase.

Expert Solution

Rahul Sunny answered 9 months ago

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