tarifdisc_pics080313_edited_0 (1).doc

tarifdisc_pics080313_edited_0 (1).doc - a/b pm =(a bc/2b c...

  • No School
  • AA 1
  • 7

This preview shows page 1 - 7 out of 7 pages.

Figure 1 : Uniform monopoly pricing Marginal revenue equals marginal cost for 2 bc a q m , and the corresponding price is b bc a p m 2 . MR q a a-bc q m =(a-bc)/2 c p m =(a+bc)/2b a/b D
Image of page 1

Subscribe to view the full document.

Figure 2 : Surpluses and Deadweight Loss CS : consumer surplus (triangular area with vertical stripes between the inverse demand curve, D, and price p m ; PS : producer surplus (rectangular area in dots above marginal cost); DWL : deadweight loss (triangular area with horizontal ticking) a q m c p m a/b D CS PS DWL q
Image of page 2
Figure 3 : Sub-optimality of two-part pricing CS 1 : Consumer surplus for Type 1 (triangular area in dots between the inverse demand curve D 1 and price P. L K J M N q 2 D 1 D 2 p mar CS 1 q 1 c q P (€ per unit)
Image of page 3

Subscribe to view the full document.

Figure 4 : Tariffs and informational rents The tariff T 1 , paid by Type 1 buyers, is their gross surplus, the area under demand curve D 1 . The informational rent is the area between the two demand curves, from quantity 0 to
Image of page 4
Image of page 5

Subscribe to view the full document.

Image of page 6
Image of page 7

{[ snackBarMessage ]}

What students are saying

  • Left Quote Icon

    As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

    Student Picture

    Kiran Temple University Fox School of Business ‘17, Course Hero Intern

  • Left Quote Icon

    I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

    Student Picture

    Dana University of Pennsylvania ‘17, Course Hero Intern

  • Left Quote Icon

    The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

    Student Picture

    Jill Tulane University ‘16, Course Hero Intern