Question
In: Economics
Under first-degree price discrimination, a monopolist produces the efficient output. Is this true or false? Explain...
Under first-degree price discrimination, a monopolist produces the efficient output. Is this true or false? Explain using an appropriate diagram.
Solutions
Expert Solution
TRUE .
Under first degree price discrimination the firm charges each consumer his or her reservation price . Thus there is no consumer surplus left . The total surplus is equal to producer surplus . But here there is no dead weight loss created because the firm produces till the point where price is equal to marginal cost . The last consumer who has the lowest reservation price is considered if his reservation price matches the marginal cost . Thus first degree of price discrimination will always have as a result a Pareto efficient level of output as marginal willingness to pay will be equal to marginal cost .
Rahul Sunny answered 2 years agoRelated Solutions
Under first-degree price discrimination, a monopolist produces the efficient output. Is this true or false? Explain...
Under first-degree price discrimination, a monopolist produces
the efficient output. Is this true or false? Explain elaborately
using an appropriate diagram.
Q4 i) Under first-degree price discrimination, a monopolist produces the efficient output. Is this true or...
Q4 i) Under first-degree price discrimination, a monopolist
produces the efficient output. Is this true or false? Explain using
an appropriate diagram.
ii) Several generators pollute the environment by emitting
carbon dioxide. Generators have different costs of reducing carbon
emissions. The government wants to put a cap on total emissions.
Putting a cap on each generator is more efficient compared to
issuing tradeable emissions permits to each generator. Is this true
or false? Explain your answer.
What is first-degree price discrimination? Is the outcome under perfect price discrimination allocatively and productively efficient?...
What is first-degree price discrimination? Is the outcome under
perfect price discrimination allocatively and productively
efficient? How does your answer change if the monopolist cannot
price discriminate?
A monopolist is using third-degree price discrimination. Which of the following statements are true? I. ...
A monopolist is using third-degree price discrimination. Which
of the following statements are true?
I.
If a monopolist can use either the first-degree price
discrimination or the third-degree price discrimination, then using
third-degree price discrimination results in strictly higher profit
than using first-degree price discrimination.
II.
A monopolist using third-degree price discrimination needs to know
the willingness to pay of different groups of consumers
III.
Student discounts are an example of third-degree price
discrimination
Group of answer...
4. Define first degree price discrimination, second degree price discrimination, and third degree price discrimination. Provide...
4. Define first degree price discrimination, second degree price
discrimination, and third degree price discrimination. Provide an
example of each.
Define price discrimination. Explain the difference between first-degree and third-degree price discrimination with two examples of...
Define price
discrimination. Explain the difference between first-degree and
third-degree price discrimination with two examples of each. Your
answer will not be complete without two examples of each.
Provide your answer
here. DO NOT TRY TO COPY/PASTE YOUR ANSWER.
Provide an example of price discrimination and classify it as first-degree, second-degree or third-degree price discrimination.
Provide an example of price discrimination and classify it as
first-degree, second-degree or third-degree price
discrimination.
Provide an example of price discrimination and classify it as first-degree, second-degree or third-degree price discrimination
Provide an example of price discrimination and classify it as
first-degree, second-degree or third-degree price
discrimination
Suppose a pure monopolist sells output in two different markets [A&B]. (third-degree price discrimination!). The demand...
Suppose a pure monopolist sells output in two different markets
[A&B]. (third-degree price discrimination!). The demand curves
are given as: Market A: PA = 20 - .1QA Market B: PB = 10 - .1QB
where PA, QA are price and quantity in Market A; and PB, QB are
price and quantity in Market B. The firm's marginal cost of
production, MC=$5.00 and constant (hence, MC=AC). Fixed costs are
zero.
a) Determine the profit-maximizing quantity (Q) and price (P)
for each...
Please explain the the characteristics and welfare effects of a) first-degree price discrimination. b) third-degree price...
Please explain the the characteristics and
welfare effects of
a) first-degree price discrimination.
b) third-degree price discrimination.
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