Economics: Principles & Policy
14th Edition
ISBN: 9781337696326
Author: William J. Baumol; Alan S. Blinder; John L. Solow
Publisher: Cengage Learning
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Question
Chapter 12, Problem 8DQ
To determine
The impact of charging a discriminating price.
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Suppose that Jawa Timur Park offers a discount on admission to residents of Batu. What kind of price discrimination is this? What does this imply about the elasticity of demand for Jawa Timur Park attractions by Batu?
In which cases would an organization benefit from using direct and indirect price discrimination? Does market structure influence the capacity of the firm to use price discrimination?
If, in a monopoly market, the demand for a product is p = 195 − 0.10x and the revenue function is R = px, where x is the number of units sold, what price will maximize revenue? (Round your answer to the nearest cent.)
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Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.Similar questions
- The organisers of a college basketball tournament estimate that the demand for tickets by adults is given by QAD = 2,750 – 50P and that the demand for tickets by students is given by Q ES = 7,750 – 200P. The total cost of organising the tournament is given by C = 10 + 0.01Q², with Q being the number of spectators. a) The directors of the organization of the championship consider that price discrimination can give them a bad image and, therefore, announce a single price for all attendees. Calculate the number of tickets that will allow them to maximise profits and the price of each ticket. Represent graphically. b) In the face of harsh criticism from student associations, the organisers are considering segmenting the market and setting different prices for adults and students. How many tickets will you sell in this case and at what prices? Represent graphically. c) What pricing strategy do you think the organisers will ultimately opt for?arrow_forwardIs this a form of price discrimination? Why? Include in your analysis differing levels of elasticity, if relevant, and any other feature. Why would an airline use this practice? Provide a dollar and cents example. The airlines caught up with this scheme and ended it. What principal of price discrimination did the students violate so as to end it?arrow_forwardThe marginal cost pricing model calculates a markup over marginal costs using estimates of the price elasticity of demand. Will any other pricing strategy result in higher profits?arrow_forward
- What motivate an attraction to apply price discriminations? Will they succeed in applying price discrimination even though they are NOT a monopolist? Discuss your answer with a specific example of an attraction applying price discrimination in Malaysia.arrow_forwardDescribe the concept of price discrimination with an example.arrow_forwardExample of a price discrimination.arrow_forward
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