Question 6 Which of the following statements is incorrect in comparing regular monopoly with perfect price discrimination? Perfect price discrimination increases deadweight loss. Perfect price discrimination achieves efficient output. Perfect price discrimination increases producer surplus. Perfect price discrimination decreases consumer surplus. A Moving to another question will save this response.

The creation of monopoly results in gains to:OPTIONSProducers at no expense to consumers.Producers at the expense to consumers.Consumers at the expense to producers.Consumers at no expense to producers.

Exhibit 9-7 Monopolist (dollars) 10 8 6 0 Quantity earn an hourly profit of $240. MR As shown in Exhibit 9-7, in the short run, the monopoly will: earn an hourly profit of $80. MC break even (i.e., earn zero economic profit). suffer an hourly loss of $160.

What is price discrimination? From the perspective of running a business, is this a good thing or bad thing for profits?

Problem 1. Market demand is P = 100-0.25Q, where Q is the total quantity demanded by consumers. Monopoly's costs are C = 10Q. (10 marks) a) Calculate prices and quantities if the monopoly uses block pricing with two prices. Calculate CS, DWL and firm's profit and demonstrate on a diagram. b) Find firm's output and profit if the firm engages in perfect price discrimination. Show on a diagram. I

What can you say about the price, with and without price discrimination

Which of the following statements is true of a monopoly as compared to a perfectly competitive market with the same costs? * Consumer surplus is smaller. Profit is smaller. Deadweight loss is smaller. Total surplus is larger. O Quantity is larger.

Conditions for price discrimination Price discrimination is the practice of selling the same good at more than one price when the price differences are not justified by cost differences. Evaluate the following statement: "Price discrimination is not possible when a good is sold in a perfectly competitive market." False, because perfectly competitive firms do not profit - maximize by setting marginal revenue equal to marginal cost True, because perfectly competitive firms have no market power False, because perfectly competitive firms have market power None of these choices Examples of price discrimination Cho and Ginny are debating the use of coupons by grocery stores. Cho says, "The use of coupons in grocery stores represents a means of price discrimination. It's pure and simple. Coupons do reduce the price of groceries, but mostly to people who are less likely to buy at the full price." By contrast, Ginny contends, "Coupons do not constitute price discrimination. They simply…

Students were able  to obtain these tickets, make fictitious reservations, cancel the reservations at the last minute, and secure a seat on the flight at a discounted price.  Answer the following questions. 1. Is this a form of price discrimination? Why? Include in your analysis differing levels of elasticity, if relevant, and any other feature  2. Why would an airline use this practice?     Provide a dollar and cents example. 3. The airlines caught up with this scheme, what principal of price discrimination did the students violate so as to end it?

Explain how price discrimination increases profit.