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ECON103_Assignment4 - (iii support your explanations with...

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ECON 103, Fall 2008 Simon Fraser University Assignment 4 Due in tutorials in the week of November 17 th . Question 1. There are several ways in which a price searching firm determines the profit maximizing output and price: ordinary monopoly pricing, perfect price discrimination, ordi- nary price discrimination, and two part pricing. Which of the above pricing strategies result in efficient output and which pricing strategies will bring about inefficiency? For full marks: (i) define what is efficient output; (ii) for each pricing strategy shortly describe the ‘rule’ by which the firm determines output and price and comment whether this rule will result in efficient output;
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Unformatted text preview: (iii) support your explanations with diagrams, for each pricing strategy show the efficient out-put and the output that the monopoly will produce. (7 points) Review Question 6 from Ch. 13 . For full marks your explanations should include short explanation of how the all-or-nothing demand curve is derived and should use a diagram with clearly marked areas that represent consumer’s surplus. You can use problem 18 as a numerical example to demonstrate your explanations. (3 points) Problems 10 and 12 from Ch. 13 of the required textbook. (5 points each) 1...
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