4-22-09 - Microeconomics Class Notes 4/22/09 TC = VC + FC...

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TC = VC + FC Example: GM is divesting itself for next to nothing They are willing to give away part of the company in order to rid themselves of their FIXED COSTS The Final Exam will be longer, but it will still only be on the material since the last exam More free response questions Price Discrimination – charging different people different prices for the exact same product or service 1. Split the market into 2 or more groups a. Determine which groups have a more elastic demand curve b. Give quantity discounts (if you buy a large amount of the product, a lower price is charged) c. Perfect Price Discrimination i. The following services are NOT examples of price discrimination, but ARE EXAMPLES of different prices 1. Gas prices ARE NOT price discrimination 2. Insurance premiums not really reflect risk ii. EXAMPLES of price discrimination : 1. Health clinic income based a. Under 50,000 b. Over 100,000 2. Cars Haggling 3. Anything where you negotiate
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This note was uploaded on 06/03/2009 for the course ECON 200 taught by Professor Nonnenmacher during the Spring '09 term at Allegheny.

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4-22-09 - Microeconomics Class Notes 4/22/09 TC = VC + FC...

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