Price and Product Discrimination

Price and Product Discrimination - demand . Product...

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1 Price and Product Discrimination 1. Price discrimination. 2. Product discrimination. Price Discrimination Price discrimination refers to charging different buyers different prices for the same product. The markup rule implies that a firm maximizes profits by setting a higher markup in the market with less elastic
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Unformatted text preview: demand . Product Discrimination Product discrimination refers to charging different markups for the basic product and an optional upgrade. If the demand for the upgrade is less elastic than the demand for the basic product, then the firm maximizes profits by applying a higher markup to the upgrade....
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This note was uploaded on 04/02/2008 for the course ECON 200 taught by Professor Cramer during the Spring '07 term at University of Arizona- Tucson.

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