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Unformatted text preview: d) Now, assume that this firm engages in perfect price discrimination and sells each unit of its product at a price equal to the maximum price the buyer of that unit of the product would be willing to pay. Complete the table below by computing total revenue and marginal revenue for the firm. Q P=AR TC 0 $34 $20 1 32 36 2 30 46 3 28 50 4 26 54 5 24 56 6 22 68 7 20 80 8 18 100 e) What is the marginal revenue that the firm (acting as a perfect price discriminator) obtains from the sale of each additional unit? Show this above in the space provided . f) At the profit maximizing level of output, how many units will the perfectly price discriminating firm sell? . What are the total economic profits for this firm? . g) Compare the economic effects of price discrimination to no price discrimination for the firm in terms of profits, price, and output graphically in the space below....
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- Fall '09