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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.
Wiki User
∙ 13y ago
Wiki User
∙ 12y agothe seller { firm} must be able to control the supply otherwise competitors will sell him in the dearer market . the markets must be separated, for it to be successful. the buyers { consumers} must also be divided depending on their income.
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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
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 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.
Price discrimination is prima facie evidence of what economic condition?
monopoly
Why would a firm practice price discrimination?
price discrimination allows companies to defend
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
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 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.
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.
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.
How does a monopoly fix its price?
mw3
How does monopoly fix its price?
mw3
What is meant by the term discrimination?
Answer: Price discrimination is the practice of one retailer, wholesaler, or manufacturer charging different prices for the same items to different customer. This is a widespread practice that does not necessarily imply negative discrimination. Early forms of price discrimination certainly existed in Jim Crow law states, where a black consumer might very likely pay more for the same quantity and items than a white consumer would. In general, this type of price discrimination is very rare today. Price discrimination, as it is now understood, is separated into degrees. First, second and third degree price discrimination exist and apply to different pricing methods used by companies. Much depends on the understanding of the market in segments, and also the consumer's ability to pay a higher or lower price, called elasticity of demand. A person who might pay more for an item is thought to have a low elasticity of demand. Another person who will not pay as much has a high elasticity of demand.
Why technological monopoly is allowed?
It is not encouraged and does not exist in practice.
