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Unformatted text preview: : Charging different price for a single good. (Ex. Airline, Movie Theater) In order to price discriminate: 1. Need to be able to distinguish types of buyers 2. Must sell a product that cannot be resold (These are not for perfect discrimination) Perfect Price Discrimination: 1. MR coincides with the Demand price. (Firms get every consumer benefit. 2. D=MR again 3. Maximize the total surplus (no dead weight) 4. Consumer surplus =0 (producer gets all) Oligopoly : -Small number of firms compete in the market-Natural or legal barriers to entry7...
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- Spring '09
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