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Unformatted text preview: o At Q comp , MU=MC optimum for society o Price Discrimination – selling same good at diff. prices to diff. customers 1. Store coupons 2.airlines- higher price if book short time ahead – higher prices if don’t stay Sat. night 3. Sliding fee scales- doctors, lawyers- higher prices to higher inc. 4. Senior Citizen discount Why price discrim? Firms ↑ profits. Characteristics for “successful” price discrim. (for firm) • 1. Not perf. Comp. • 2. Firm must have some way to distinguish buyers on basis of elast. – more elastic – lower prices – less elastic – higher P • 3. Difficult or impossible to resell “limit 2 per customer”...
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This note was uploaded on 04/19/2011 for the course EC 201 taught by Professor Ballard during the Fall '08 term at University of Michigan.
- Fall '08