econ100_winter2010_lecture17_topost

econ100_winter2010_lecture17_topost - Summary: Monopoly...

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Summary: Monopoly Pricing No price discrimination Set MR=MC to find Q Find P(Q) from demand curve First-degree price discrimination Rarely possible Requires ability to identify max willingness to pay for each individual consumer Allows monopolist to capture all of consumer surplus
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Summary: Monopoly Pricing (cont’d) Second-degree price discrimination Block Pricing (one example of 2 nd degree charging different P for different quantities of good) Maximize profit function with > 1 price Profit function of form (Q 1 is first block, Q 2 is total): P 1 *Q 1 + P 2 (Q 2 -Q 1 ) MC(Q 2 )
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Summary: Monopoly Pricing (cont’d) Third-degree price discrimination Must be able to identify different consumer groups Must prevent resale of good across consumer
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econ100_winter2010_lecture17_topost - Summary: Monopoly...

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