Chap009.6 - Slide 34 Examples of Price Discrimination z...

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6 Chapter 9: Monopoly and Other Forms of Imperfect Competition Slide 31 Why the Invisible Hand Breaks Down Under Monopoly ± Monopoly z Profits are maximized where MR = MC. z P > MR z P > MC z Deadweight loss ± Perfect Competition z Profits are maximized where MR = MC. z P = MR z P = MC z No deadweight loss Chapter 9: Monopoly and Other Forms of Imperfect Competition Slide 32 ± Difficulties in Reducing the Deadweight Loss of Monopolies z Enforcing antitrust laws z Patents, copyrights, and innovation z Natural monopolies Why the Invisible Hand Breaks Down Under Monopoly Chapter 9: Monopoly and Other Forms of Imperfect Competition Slide 33 ± Price Discrimination z The practice of charging different buyers different prices for essentially the same good or service Why the Invisible Hand Breaks Down Under Monopoly Chapter 9: Monopoly and Other Forms of Imperfect Competition
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Unformatted text preview: Slide 34 Examples of Price Discrimination z Senior citizens and student discounts on movie tickets z Supersaver discounts on air travel z Rebate coupons Why the Invisible Hand Breaks Down Under Monopoly Chapter 9: Monopoly and Other Forms of Imperfect Competition Slide 35 Economic Naturalist z Why do many movie theaters offer discount tickets to students? Why the Invisible Hand Breaks Down Under Monopoly Chapter 9: Monopoly and Other Forms of Imperfect Competition Slide 36 How many manuscripts will Carla edit? z Opportunity cost = $29 z Must charge the same price z TR = P x Q z MR is the difference in TR from adding another student Why the Invisible Hand Breaks Down Under Monopoly...
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