Questions tagged [price-discrimination]
Situations in which different consumers pay different prices (or, more precisely, different price-cost margins).
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Plot the dependence of the monopolist’s output (Q) on the price ceiling ($\overline{P}$)
Full task condition: A monopolistic firm’s costs are $TC=\begin{cases} 170+20q, \ q>0 \\ 0 \ q=0 \end{cases}$. There are two groups of consumers of equal size in the monopolist’s market: $Q_{d1} = ...
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1answer
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Price in Second-degree Price Discrimination
In 2nd degree price discrimination, the producer only knows that there are different consumer groups who have different demand curves. He thus adjusts the quantity/quality of the product in a way that ...
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Optimal fee decisions in a Two-Part Tariff with resale and third-degree price discrimination
Say I have two customers - one is a low type and one is a high type (don't worry about their demand functions but assume they are linear). In the original case, we can differentiate consumers (i.e we ...
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Marginal Cost of Labour Under Monopsony - is the real world like this?
How common is a Perfectly Discriminating Monopsonist in respect to labour rates?
Or anything close to it?
Standard explanations show a normal supply curve for labour, and the marginal cost of that ...
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1answer
23 views
Name for the intentional reduction in quality in a non-software, price discrimination setting
Is there a general term in economics for the intentional reduction in quality to reduce deviation to the worst alternative in price discrimination? Like "crippleware," but applicable in non-...
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2answers
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A question about intertemporal price discrimination
Usually intertemporal price discrimination worked like this :
Releasing something at higher price, then lower the price later.
But did this work in reverse too?
I've seen some example on video games ...
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1answer
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Multiplant Monopoly With Third Degree Price Discrimination
I am trying to do an exercise with a Monopoly Firm with 2 production plants that supplies 3 different markets.
I know how to do every case (Multiplant monopoly or third degree price discrimination), ...
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4answers
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What does economics say about "price gouging" during an emergency?
Many states have laws against "price gouging" during an emergency.
Are these laws counterproductive?
Take the current situation with toilet paper and water. When someone sees rolls of toilet paper ...
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1answer
500 views
is univerisity's scholarships a price discrimination?
Many universities allocate financial aid to undergraduate students on the basis of some measure of need. Does this practice reflect charity or price discrimination? If it reflects price discrimination,...
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1answer
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Are there examples of strategies where a combination of third degree pricing and two-part tariffs are used together?
Of course, I am only interested in instances where the combination of the two strategies ultimately lead to higher profits than if the monopolistic firm had used only one.
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1answer
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Can a monopoly supply negative units to one of its two markets?
A question I have seen in my microeconomics textbook is as follows:
Consider a monopoly supply to both a domestic and foreign market, where the market demands are:
Yd(pd) = 20 - 2pd, hence pd(yd) = ...
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Price discrimination question
For this question the answer is b which is the TR of group 2. If price is the same, my question is why isn't the demand function of group 1 considered? Why is the TR of group 1 omitted?
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3rd Degree Price Discrimination
I came across a True/False question in my economics problem set:
Is the following statement true or false?
"A monopolist can practice
third-degree price discrimination in the two markets it ...
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2answers
79 views
What if price were a function of buyer's income?
If everyone's income were public information, would purely profit-seeking sellers benefit from charging different prices to people based on their different incomes? My intuition says yes because a ...
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1answer
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Imperfect Price Discrimination profit per group
During imperfect price discrimination is it possible to determine profit per group. For example:
Aggregated Cost function: C(Q) = 18*Q + 5; where Q = q1 + q2
Aggregated Demand (AD) for group 1: q1(...
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1answer
130 views
What is the monotone hazard rate assumption used for?
I was reading this article on advance purchase discounts and pricing in which the author uses the monotone hazard rate assumption. Why does the author use it?
The article is Advance-purchase ...
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2answers
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The economics of continually selling a product for under its market value?
What are the economic principles behind a company continually selling a product for well under its market value. Continually here expressing that it does not appear to be some short term method to ...
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1answer
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Block pricing vs Perfect price discrimination
I have just learned about Perfect price discrimination and block pricing. And I was wondering, in the case of these two graphs
Block pricing & Perfect price discrimination. Why, in case of the ...
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2answers
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Price discriminating monopolist question
A price discriminating monopolist sells in two markets. Inverse demand in market 1 is given by: $$P_1(Q_1) = 80 - (1/2)Q_1$$ and inverse demand in market 2 is given by: $$P_2(Q_2) = 100 - Q_2$$ The ...
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What is the Economic Rationale for Discounted Early-Bird Parking?
Most urban parking structures/lots in the US seem offer so-called "early bird" discounts for parking, where a substantially discounted flat rate applies to customers entering before a certain cutoff ...
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Price discrimination
If I have 3 consumers who I want to sell package 1, 2 and 3 to respectively. Meaning consumer 1 I would like to sell package 1 to, consumer 2 I would like to sell package 2 to and so on. The packages ...
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1answer
973 views
When there is a third degree price discrimination, why is the total MR curve kinked at the top?
I know that the total MR = MR of student + MR of adult, but wy is it kinked at the top?
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Example of Price discrimination
Can anyone explain why this isn't an example of price discrimination:
The same golf club selling for $100 at Sports Authority and 80 on Amazon.
I believe that consumer's demand elasticity to price at ...
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How to compute Social Welfare in this model?
The first part of this scientific article analyzes reward-based crowdfunding. The assumptions are:
Seller is a monopolist
Unit mass of consumers
Unit demand
Two periods
Individuals are identified by $...
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Menu-pricing with three consumer groups
I want to analyze the following setting:
An entrepreneur (with monopoly power) sells a product in two periods. In period 1 there are two consumer groups (denoted by 1 and 2) and in period 2 there is ...
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2answers
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In which market structures does the producer employ price discrimination?
I was recently reading up on the Price Discrimination, first second and third degree. Although the author has laid out the concept neatly, there are no connections established between this concept and ...
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How to estimate empirically a demand curve
Suppose I have a small business that sell ice creams.
An Icecream cost 2$, and every day I have different values of sales.
...
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2answers
133 views
Increasing prevalence of price discrimination
It seems to me that the variation of prices for similar or identical products has grown over the last decade. A few examples:
On major air routes, price differences between low-cost and traditional ...
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1answer
255 views
Monopoly second degree discrimination - two part tariff
In a Monopoly with second degree discrimination - two part tariff will the consumer with higher demand always pay a higher entrance fee and lower unit price than the cunsumer with lower demand or is ...
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Fuel trading a market with near-perfect competition
Can I classify the fuel trading market (wholesalers buying and selling fuel by phone) as a market with near-perfect competition?
It is a market with many sellers and buyers, the product is ...
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4answers
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Is net neutrality not important in a competitive market of internet providers?
In my understanding, allowing ISP to throttle sites that use a lot of traffic is just price discrimination. The ISP will charge sites like Netflix, which will then pass the cost to Netflix consumers. ...
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3answers
526 views
Price discrimination- how much is optimal?
I am of the understanding that as a general rule, price discrimination does not benefit consumers. Yet I can think of a situation where it does. Look at two countries, Australia and India. The price ...
