Microeconomics (7th Edition)
7th Edition
ISBN: 9780134737508
Author: R. Glenn Hubbard, Anthony Patrick O'Brien
Publisher: PEARSON
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Chapter 16, Problem 16.3.11PA
To determine
Comparing pricing strategies.
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In terms of reality, could you show that it is easier for a firm to practice second-degree price discrimination than it is for a firm to practice first-degree price discrimination? If you can use a graph, that would help me understand thank you.
Jabari's HookNLadder is the only company selling fire engines in the fictional country of Alexandrina. Jabari initially produced five trucks, but then
decided to increase production to six trucks. The following graph gives the demand curve faced by Jabari's HookNLadder. As the graph shows, in order
to sell the additional fire truck, Jabari must lower the price from $160,000 to $120,000 per truck. Notice that Jabari gains revenue from the sale of the
additional engine, but at the same time, he loses revenue from the initial five engines because they are all sold at the lower price.
Use the purple rectangle (diamond symbols) to shade the area representing the revenue lost from the initial five engines by selling at $120,000 rather
than $160,000. Then use the green rectangle (triangle symbols) to shade the area representing the revenue gained from selling an additional engine
at $120,000.
PRICE (Thousands of dollars per fire engine)
220
200
180
160
140
120
100
80
60
40
0
Jabari
0
+
1
True…
Jabari's HookNLadder is the only company selling fire engines in the fictional country of Alexandrina. Jabari initially produced five trucks, but then
decided to increase production to six trucks. The following graph gives the demand curve faced by Jabari's HookNLadder. As the graph shows, in order
to sell the additional fire truck, Jabari must lower the price from $160,000 to $120,000 per truck. Notice that Jabari gains revenue from the sale of the
additional engine, but at the same time, he loses revenue from the initial five engines because they are all sold at the lower price.
Use the purple rectangle (diamond symbols) to shade the area representing the revenue lost from the initial five engines by selling at $120,000 rather
than $160,000. Then use the green rectangle (triangle symbols) to shade the area representing the revenue gained from selling an additional engine
at $120,000.
PRICE (Thousands of dollars per fire engine)
220
200
180
160
140
120
100
80
60
40
20
Jabari
0
0 1 2 3…
Chapter 16 Solutions
Microeconomics (7th Edition)
Ch. 16 - What is the law of one price? What is arbitrage?Ch. 16 - Prob. 16.1.2RQCh. 16 - Prob. 16.1.3PACh. 16 - Prob. 16.1.4PACh. 16 - Prob. 16.1.5PACh. 16 - Prob. 16.1.6PACh. 16 - Prob. 16.2.1RQCh. 16 - In 2017, the Rock and Roll Hall of Fame and Museum...Ch. 16 - Prob. 16.2.3RQCh. 16 - Prob. 16.2.4PA
Ch. 16 - Lexmark charges lower prices for its printer...Ch. 16 - Prob. 16.2.6PACh. 16 - Prob. 16.2.7PACh. 16 - Prob. 16.2.8PACh. 16 - Prob. 16.2.9PACh. 16 - Prob. 16.2.10PACh. 16 - Prob. 16.2.11PACh. 16 - Prob. 16.2.12PACh. 16 - Prob. 16.2.13PACh. 16 - Prob. 16.2.14PACh. 16 - Prob. 16.2.15PACh. 16 - Prob. 16.3.1RQCh. 16 - Prob. 16.3.2RQCh. 16 - Prob. 16.3.3RQCh. 16 - Prob. 16.3.4PACh. 16 - Prob. 16.3.5PACh. 16 - Prob. 16.3.6PACh. 16 - Prob. 16.3.7PACh. 16 - Prob. 16.3.8PACh. 16 - Prob. 16.3.9PACh. 16 - Prob. 16.3.10PACh. 16 - Prob. 16.3.11PACh. 16 - Prob. 16.3.12PACh. 16 - Prob. 16.2CTECh. 16 - Prob. 16.3CTE
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- Jabari's HookNLadder is the only company selling fire engines in the fictional country of Alexandrina. Jabari initially produced four trucks, but then decided to increase production to five trucks. The following graph gives the demand curve faced by Jabari's HookNLadder. As the graph shows, in order to sell the additional fire truck, Jabari must lower the price from $105,000 to $90,000 per truck. Notice that Jabari gains revenue from the sale of the additional engine, but at the same time, he loses revenue from the initial four engines because they are all sold at the lower price. Use the purple rectangle (diamond symbols) to shade the area representing the revenue lost from the initial four engines by selling at $90,000 rather than $105,000. Then use the green rectangle (triangle symbols) to shade the area representing the revenue gained from selling an additional engine at $90,000. PRICE (Thousands of dollars per fire engine) Jabari 165 150 135 120 105 90 75 60 45 30 15 D 0 True 1…arrow_forwardJabari's HookNLadder is the only company selling fire engines in the fictional country of Alexandrina. Jabari initially produced four trucks, but then decided to increase production to five trucks. The following graph gives the demand curve faced by Jabari’s HookNLadder. As the graph shows, in order to sell the additional fire truck, Jabari must lower the price from $105,000 to $90,000 per truck. Notice that Jabari gains revenue from the sale of the additional engine, but at the same time, he loses revenue from the initial four engines because they are all sold at the lower price. Use the purple rectangle (diamond symbols) to shade the area representing the revenue lost from the initial four engines by selling at $90,000 rather than $105,000. Then use the green rectangle (triangle symbols) to shade the area representing the revenue gained from selling an additional engine at $90,000arrow_forwardJabari's HookNLadder is the only company selling fire engines in the fictional country of Alexandrina. Jabari initially produced eight trucks, but then decided to increase production to nine trucks. The following graph gives the demand curve faced by Jabari's HookNLadder. As the graph shows, in order to sell the additional fire truck, Jabari must lower the price from $80,000 to $40,000 per truck. Notice that Jabari gains revenue from the sale of the additional engine, but at the same time, he loses revenue from the initial eight engines because they are all sold at the lower price. Use the purple rectangle (diamond symbols) to shade the area representing the revenue lost from the initial eight engines by selling at $40,000 rather than $80,000. Then use the green rectangle (triangle symbols) to shade the area representing the revenue gained from selling an additional engine at $40,000. PRICE (Thousands of dollars per fire engine) 220 200 180 160 140 120 100 80 60 40 20 0 Jabari 0 1 O…arrow_forward
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