Lecture 6

Lecture 6 - Upcoming dates to note Monday Jan 21 is...

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1 Upcoming dates to note • Monday Jan 21 is university holiday (no class, office hours, or discussion sections) • Practice exam will be handed out Wednesday (posted by Tuesday) for review in discussion sections Wednesday Jan 23-Tuesday Jan 29 • Exam Wed Jan 30 expected to cover through end of Chapter 13 Chapter 12: Monopoly A. Total revenue and marginal revenue B. Total cost, marginal cost and fixed cost C. Profit maximization D. Comparison between monopoly and perfect competition E. Price discrimination Perfect price discrimination • Firm charges each customer the maximum that person is willing to pay • Leads to same level of output as perfect competition (is therefore efficient) • Leaves zero surplus for consumers, all for producers Price discrimination is hard to implement: (1) It’s against the law Clayton Act of 1914: “It shall be unlawful for any person engaged in commerce, in the course of such commerce, either directly or indirectly, to discriminate in price between different purchasers of commodities of like grade and quality” Price discrimination is hard to implement: (1) It’s against the law (2) All customers will try to buy at the lowest price (3) Firm doesn’t know each customer’s maximal price (4) Firm must be able to prevent resale
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2 Many firms find ways to
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This note was uploaded on 03/21/2009 for the course ECON 2 taught by Professor Kim during the Spring '08 term at UCSD.

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Lecture 6 - Upcoming dates to note Monday Jan 21 is...

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