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18 votes

Why would a company sabotage its product's ability to be used for a particular purpose?

Limiting the hash rate is maximizing the demand for their product. Historically, gamers have been crucial to Nvidia's success. Their demands drive innovation, and they're the ones willing to spend ...
bta's user avatar
  • 299
12 votes
Accepted

Why would a company sabotage its product's ability to be used for a particular purpose?

This topic is explained by market segmentation with price discrimination in monopolies. This is widely used in, for example, price discounts for senior/retired people. By targetting different market ...
Matias N Goldberg's user avatar
8 votes

Why would a company sabotage its product's ability to be used for a particular purpose?

Disclaimer: I am not at all familiar with the hardware industry; in fact I believe this answer makes most of my points but is better tailored for the specific industry in question. Market share A ...
Giskard's user avatar
  • 29.4k
6 votes

Is net neutrality not important in a competitive market of internet providers?

The viewpoint is this. The ISP is responsible for relaying internet traffic to their customers - they have different models for this, by "speed", by amount of data, etc and this is working reasonably ...
Stian's user avatar
  • 159
4 votes

When there is a third degree price discrimination, why is the total MR curve kinked at the top?

I believe this is just a horizontal sum. At the very top of your graph, only adult has a part of its curve above 10.25. So when your summing horizontally student =0 Adult = x, This changes once you ...
Jarrod's user avatar
  • 163
4 votes
Accepted

What does economics say about "price gouging" during an emergency?

Actually economics does not even officially use term price gouging. Your analysis is right, actually economists dislike anti-price gauging legislation for this reason. For example, when the IGM ...
1muflon1's user avatar
  • 57.1k
3 votes

What does economics say about "price gouging" during an emergency?

There are no laws against "price gouging" where I live, at least the price of medical masks has increased 3-10 fold in the recent weeks, due to the coronavirus outbreak. Yet there is still a shortage ...
Giskard's user avatar
  • 29.4k
3 votes

The economics of continually selling a product for under its market value?

1st of all, you should distinguish cases from the Nike case and others, if any: Since Nike sells only a tiny portion of its shoes "irrationally" it cannot be seen as market value - equilibrium price, ...
Guy Louzon's user avatar
3 votes
Accepted

What is the Economic Rationale for Discounted Early-Bird Parking?

There seems to be some research on price discounting. For example, this paper studies two forms of dicounting, last-minute discounting and early-bird discounting, in settings with monopoly, duopoly ...
luchonacho's user avatar
  • 8,591
2 votes
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How to estimate empirically a demand curve

A demand curve relates Quantity demanded to Price. If ice creams are always $2 then your data won't help you estimate a demand curve. Try offering some daily specials to create some price variation. ...
Ed Rigdon's user avatar
2 votes
Accepted

Price discriminating monopolist question

MC = 2Q1 + 2Q2 for both demand functions. Set MR1 = 2Q1 + 2Q2, and MR2 = 2Q1 + 2Q1 and then you have a system of 2 unknowns and 2 equations. The solution ends up being Q1 = 15, P1 = 72.5, Q2 = 17.5, ...
Alex Toy's user avatar
2 votes

What is the monotone hazard rate assumption used for?

The motivation for this assumption is to have a unique solution. In this article, it is necessary to prove the 1st lemma, i.e. the quasi-concavity of the profit function. You find a similar ...
Yann's user avatar
  • 708
2 votes

Price discrimination question

To sell 45 units to group 2 implies a price of $220-2Q_2=130$. At that price, demand from group 1 is zero. Indeed, the very most any consumer in group 1 is willing to pay is $100$.
Ubiquitous's user avatar
2 votes

What is the Economic Rationale for Discounted Early-Bird Parking?

Some reasoning: Incoming "Early-bird" discounts relate to a time window where quantity supplied is high - parking lots are empty waiting for today's customers. Since on the other hand quantity ...
Alecos Papadopoulos's user avatar
2 votes

Name for the intentional reduction in quality in a non-software, price discrimination setting

"Lemonization" I guess. I didn't exactly make up that term with that meaning, but I suspect you won't see it often.
got trolled too much this week's user avatar
2 votes

How do i find the optimal bundle from two demand functions

Since your question has the tag “price discrimination” I’m going to assume the two demand functions are on the same good, on two different markets. When you say “optimal bundle” I think you mean “...
Nicolas Torres's user avatar
1 vote

Why would a company sabotage its product's ability to be used for a particular purpose?

To understand NVidia's position, it helps to understand a bit of the manufacturing background. NVidia's GPU's are very high-tech products. NVidia itself does not manufacture them. NVidia is known as a ...
MSalters's user avatar
  • 156
1 vote
Accepted

is univerisity's scholarships a price discrimination?

Scholarships certainly count as price discrimination. Charging different prices to different groups of consumers for the same good is third degree price discrimination, which is what occurs with ...
corran_horn's user avatar
1 vote

Can a monopoly supply negative units to one of its two markets?

Marginal cost is only guaranteed to be equal to marginal revenue in optima where $Y > 0$ (and when the profit function is concave, but in your case it is). If $$ MC(0) > MR(0) $$ the producing ...
Giskard's user avatar
  • 29.4k
1 vote

A question about intertemporal price discrimination

if the game you are talking is already has a large chunk of active players , and when certain skins which are demanded less they tend to get discounted however publisher don't actually increase the ...
Cherry's user avatar
  • 19
1 vote

A question about intertemporal price discrimination

Airline seats are often priced lower when first released and the price can rise, especially as you get closer to flight time. The effectiveness will depend on the market, pent-up demand, and thus ...
kurtosis's user avatar
  • 410
1 vote

Multiplant Monopoly With Third Degree Price Discrimination

Hint. The following are the necessary conditions for profit maximization: Monopoly with 1 plant and 1 market: $MR = MC$ Monopoly with 1 plant and 2 markets: $MR_1=MR_2=MC$ Monopoly with 2 plants and 1 ...
Herr K.'s user avatar
  • 15.5k
1 vote

What does economics say about "price gouging" during an emergency?

There is a behavioral literature that warns against `price gouging'. Two Nobel Prize winners, Richard Thaler and Daniel Kahneman, conducted surveys with Jack Knetsch. They report that 82% of survey ...
emeryville's user avatar
  • 6,975
1 vote

What if price were a function of buyer's income?

This is just perfect price discrimination. Happens sometimes with niche drugs (where drug makers can know the ability of people to pay). In this scenario, consumer surplus is completely captured by ...
user21135's user avatar
1 vote

The economics of continually selling a product for under its market value?

Consider what a downward sloping demand curve means. The first customer is willing to pay a higher price than the second customer and so on. Concretely, consider a first customer who is willing to ...
Brythan's user avatar
  • 1,182
1 vote

Block pricing vs Perfect price discrimination

In a nutshell, it is because people talk. Information asymmetry happens at the firm/consumer level. The consumer does not know exactly how much it costs the firm to produce a given product, nor are ...
Bluebird's user avatar
  • 242
1 vote

What is the Economic Rationale for Discounted Early-Bird Parking?

I've always assumed the early cars spend the day blocked in by the later cars. The parking lots would want to get that first row filled up as icing on the cake, then let them sit there through the day ...
CWill's user avatar
  • 177
1 vote

Example of Price discrimination

Price discrimination is when a firm charges different prices for a homogeneous product to different consumers. In this example we see no such discrimination among consumers. This is just a case ...
EconJohn's user avatar
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