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The monopolist pricing condition occurs where marginal cost equals marginal revenue. The monopolist does not follow usual demand or supply curves. It instead optimises its total profit by setting its production decision (aka - how many units) to where the marginal profit of the last unit equals 0, then 'marking-up' the price by setting it directly above this equilibrium on the original demand curve. The total profit derived from this condition is called the monopolist profit.
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Price discrimination is prima facie evidence of what economic condition?
monopoly
Why would a firm practice price discrimination?
price discrimination allows companies to defend
How many types of price discrimination under monopoly?
There are three main types of price discrimination under monopoly: first-degree, second-degree, and third-degree. First-degree price discrimination involves charging each consumer their maximum willingness to pay. Second-degree price discrimination offers different prices based on the quantity consumed or product version, such as bulk discounts. Third-degree price discrimination segments consumers into different groups based on observable characteristics, charging each group a different price.
Show diagrammatically how a monopoly export marketing board can practice price discrimination between the domestic and foreign market.?
A monopoly export marketing board can practice price discrimination by setting different prices for domestic and foreign consumers. In a diagram, the vertical axis represents price and the horizontal axis represents quantity. The demand curve for the domestic market is typically more inelastic, allowing the board to charge a higher price (P1) compared to the more elastic foreign demand curve, where the price (P2) is lower. This pricing strategy maximizes revenue by capturing consumer surplus from both markets while ensuring that the quantity sold in each market reflects the respective demand elasticity.
What are assumptions of price discrimination?
>The idea of price discrimination is to transfer the consumers profit to producers>Firstly there should not be any close substitutes available, because then people might use them instead. So price discrimination can occur in monopoly >Secondly the producer must keep the market separate, so that no resale of the product is possible>Thirdly two markets with different elasticity of demand. Price discrimination is successful when costs do not rise when selling on different markets
Price discrimination is prima facie evidence of what economic condition?
monopoly
Why would a firm practice price discrimination?
price discrimination allows companies to defend
How many types of price discrimination under monopoly?
There are three main types of price discrimination under monopoly: first-degree, second-degree, and third-degree. First-degree price discrimination involves charging each consumer their maximum willingness to pay. Second-degree price discrimination offers different prices based on the quantity consumed or product version, such as bulk discounts. Third-degree price discrimination segments consumers into different groups based on observable characteristics, charging each group a different price.
Show diagrammatically how a monopoly export marketing board can practice price discrimination between the domestic and foreign market.?
A monopoly export marketing board can practice price discrimination by setting different prices for domestic and foreign consumers. In a diagram, the vertical axis represents price and the horizontal axis represents quantity. The demand curve for the domestic market is typically more inelastic, allowing the board to charge a higher price (P1) compared to the more elastic foreign demand curve, where the price (P2) is lower. This pricing strategy maximizes revenue by capturing consumer surplus from both markets while ensuring that the quantity sold in each market reflects the respective demand elasticity.
What are assumptions of price discrimination?
>The idea of price discrimination is to transfer the consumers profit to producers>Firstly there should not be any close substitutes available, because then people might use them instead. So price discrimination can occur in monopoly >Secondly the producer must keep the market separate, so that no resale of the product is possible>Thirdly two markets with different elasticity of demand. Price discrimination is successful when costs do not rise when selling on different markets
What is this practice called a firm sells natural gas to a city for one price and sells the same gas to an outlying village at another price?
price discrimination
Why do companies practice price discrimination?
Companies practice price discrimination in order to maximize their profits by charging different prices to different customers based on their willingness to pay. This strategy allows companies to capture more value from customers who are willing to pay higher prices, while still attracting price-sensitive customers with lower prices.
What is the starting price for the monopoly auction?
The starting price for the Monopoly auction is usually 1.
Price discrimination is indistinguishable from dumping?
Price discrimination is indistinguishable
What is the definition of price discrimination?
We know that in the prefect competition there are enormous buyers and seller but in the monopoly and imperfect competition there are few sellers and tremendous buyers, in this context, in imperfect competition seller sets the different prices to the different buyers, which is better known as price discrimination. More specially, price discrimination is the process of charging different prices to different customers as per the customers need, level of income, social status etc.
How would you describe unfair trade practice laws?
These laws involve various types of business competition, especially with reference to trademarks, price maintenance, and price discrimination.
What are the necessary condtions for a firm to practice price discrimination?
There must be a constant and there must be a consistent price differential for that constant. IE, by age, sex, religion, ethnicity, etc.
