Lecture26 - Lecture 26 Price discrimination Perfect price...

Info iconThis preview shows pages 1–8. Sign up to view the full content.

View Full Document Right Arrow Icon
Lecture 26 Price discrimination
Background image of page 1

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

View Full DocumentRight Arrow Icon
Perfect price discrimination (1 st degree) AC MC D MR P m Q m Single-price Monopoly profits Consumer surplus = MR Monopolist More profits
Background image of page 2
Perfect price discrimination (1 st degree) AC MC D P m Q m Single-price Monopoly profits Consumer surplus = MR Monopolist More profits Q discrimination monopolist
Background image of page 3

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

View Full DocumentRight Arrow Icon
How a labor union can get all the surplus Competitive outcome: (W, H); firm surplus, A, B, C W H A B C S D
Background image of page 4
How a labor union can get all the surplus Wage contract only at W*: Hours reduced to H*, B transferred to workers; deadweight loss. W* W H* H A B C S D
Background image of page 5

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

View Full DocumentRight Arrow Icon
How a labor union can get all the surplus Wage and hour contract: W*, H or nothing. Workers get B+ C + D; firm gets A – D. If D = A, workers obtain wages equivalent to entire surplus. W* W H* H A B C D S D
Background image of page 6
Price discrimination Price discrimination requires: 1. The firm must have market power 2. Consumers need to have different willingness to pay (heterogeneity) 3. The firm must be able to identify different groups of
Background image of page 7

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

View Full DocumentRight Arrow Icon
Image of page 8
This is the end of the preview. Sign up to access the rest of the document.

Page1 / 12

Lecture26 - Lecture 26 Price discrimination Perfect price...

This preview shows document pages 1 - 8. Sign up to view the full document.

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