Price discrimination is based on the idea that each customer has his or her own maximum price he or she will pay for a good. If a monopolist sets the good's price at the highest maximum price of all the buyers in the market, the monopolist will only sell to the one customer willing to pay that much. If the monopolist sets a low price, the monopolist will gain a lot of customers, but the monopolist will lose the profits it could have made from the customers who bought at the low price but were willing to pay more. Price discrimination recognizes that groups of consumers are willing and able to pay different amounts for a good. (gradpoint)
Yes. A monopolist would tend to charge a price closer to fair market value when the demand for a good is elastic. If not demand would be affected. With a monopoly controlled inelastic good the consumer has no recourse and there for would be and the mercy of the supplier.
shift to the left.
because the monopolist firms are price maker and they can set any price they want and the customers are not perfect knowleged
they decide price and quantity.
Price discrimination is based on the idea that each customer has his or her own maximum price he or she will pay for a good. If a monopolist sets the good's price at the highest maximum price of all the buyers in the market, the monopolist will only sell to the one customer willing to pay that much. If the monopolist sets a low price, the monopolist will gain a lot of customers, but the monopolist will lose the profits it could have made from the customers who bought at the low price but were willing to pay more. Price discrimination recognizes that groups of consumers are willing and able to pay different amounts for a good. (gradpoint)
Price discrimination is based on the idea that each customer has his or her own maximum price he or she will pay for a good. If a monopolist sets the good's price at the highest maximum price of all the buyers in the market, the monopolist will only sell to the one customer willing to pay that much. If the monopolist sets a low price, the monopolist will gain a lot of customers, but the monopolist will lose the profits it could have made from the customers who bought at the low price but were willing to pay more. Price discrimination recognizes that groups of consumers are willing and able to pay different amounts for a good. (gradpoint)
Yes. A monopolist would tend to charge a price closer to fair market value when the demand for a good is elastic. If not demand would be affected. With a monopoly controlled inelastic good the consumer has no recourse and there for would be and the mercy of the supplier.
A monopolist must lower its quantity relative to a competitive market to maximize its profits because the monopolist already controls and owns the largest share of the market.
shift to the left.
because the monopolist firms are price maker and they can set any price they want and the customers are not perfect knowleged
they decide price and quantity.
A monopolist has to lower its quantity relative to the competitive market to maximize profits because the monopolist is already in control of the biggest part of the market. This means that because they're already in control, to keep the market competitive they need to release the same amount of product as their competition.
The monopolist can choose either the price or the quantity, but choosing one determines the other - they come in pairs.
Between them exist a simple line of difference, a monopolist can sale more with less money CHACHA!
Total control, as there is no competition the monopoly vendor can ask any price they wish. That is why monopolies are bad for society and Governments have to intervene in the capitalistic market.
A true monopolist will charge a VERY LOW price, so as to cause his competitors to go out of business. Then, when other companies have given up, he'll raise his prices. But in a free economy, he can't raise prices TOO high, for fear of attracting new entrants to the market. So a monopolist will invariably team up with market regulators to prevent new competition from arising. The Example of the Year of this phenomenon is the taxicab alliance supported by taxicab regulators, trying to prevent Uber and Lyft from stealing the taxi market with lower prices and better service,