Class 12-20101

Class 12-20101 - Managerial Econ: Class 12 Pricing with...

Info iconThis preview shows pages 1–5. Sign up to view the full content.

View Full Document Right Arrow Icon
THE UNIVERSITY OF BRITISH COLUMBIA Managerial Econ: Class 12 Pricing with Market Power 1. Inefficiency of Monopoly 2. Natural Monopoly 3. Non-uniform Pricing 4. Price Discrimination a. Individual Price Discrimination b. Multi-Group Price Discrimination c. Quantity-Based Price Discrimination 5. Two-Part Pricing THE UNIVERSITY OF BRITISH COLUMBIA Announcements Midterm Exam on Wednesday, Oct. 27 at 6:30 pm (to 8:30). If your last name begins with letters A – H go to Woodward 1. If your last name begins with letters I – Q go to Woodward 4. If your last name begins with letters R – Z go to Woodward 6. The midterm will cover up to Thursday (Cournot Oligopoly – Sections 11.2 and 11.3). See revised readings. 20 multiple choice and 4 longer questions (to be chosen out of 5). If you need to get a form signed for accommodation through the Access and Diversity program please see Katie Tichauer in the Undergraduate Office.
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
THE UNIVERSITY OF BRITISH COLUMBIA Office Hours 2 of 4 We have a teaching assistant, Wei Zhang, who will be holding office hours in HA 673C on Tuesdays and Thursdays 2:00 – 3:00 pm from now on. I have my regular office hours in HA 252 on Wednesday from 1:30 – 3:00 and after class until 5:15. THE UNIVERSITY OF BRITISH COLUMBIA Clicker Question 1 (Review of last class) A firm is producing positive output, has positive marginal cost, and is maximizing profit. Which of the following statements is correct? a) The rule MR = MC applies only under perfect competition. b) The rule MR = MC applies only if the firm is a monopoly. c) The rule MR = MC applies to all firms. d) The firm must be in the elastic portion of its firm-specific demand curve. e) c and d.
Background image of page 2
THE UNIVERSITY OF BRITISH COLUMBIA 1. Inefficiency of Monopoly Competition Monopoly Change Consumer Surplus A + B + CA B C = CS Producer Surplus D + EB + DB E = PS TS = CS + PS A + B + C + D + EA + B + D C+E = DWL Competition yields Q = 8 at p = $16 where demand cuts the MC (supply) curve. A monopoly produces Q = 6 at p = $18, where MC cuts the monopoly MR curve. Total surplus is less under monopoly. This is inefficient. Under monopoly, consumer surplus is A , producer surplus is B + D , and the deadweight loss is C+E. THE UNIVERSITY OF BRITISH COLUMBIA Clicker Question 2 Suppose P = 100 – 2Q and C = 20Q. With a profit-maximizing monopoly a. Deadweight loss is less than 600. b. Deadweight loss is between 600 and 750. c. Output equals 40. d. Price is less than 50. e. None of the above.
Background image of page 3

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
THE UNIVERSITY OF BRITISH COLUMBIA 2. Natural Monopoly A natural monopoly is a firm that can produce the total market output more cheaply than 2 or more firms can.
Background image of page 4
Image of page 5
This is the end of the preview. Sign up to access the rest of the document.

Page1 / 14

Class 12-20101 - Managerial Econ: Class 12 Pricing with...

This preview shows document pages 1 - 5. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online