This preview shows page 1. Sign up to view the full content.
Unformatted text preview: Slide 40 If Carla can price discriminate, how many papers will she edit? z Assume Carla can charge each student the reservation price. Why the Invisible Hand Breaks Down Under Monopoly Chapter 9: Monopoly and Other Forms of Imperfect Competition Slide 41 Example Reservation Student price A 40 B 38 C 36 D 34 E 32 F 30 G 28 H 26 Carla would edit A to F TR = $40 + $38 = $210 TC = 6 x $29 = $174 Economic Profit = $210 - $174 = $36/wk Economic Profit is $30 more Chapter 9: Monopoly and Other Forms of Imperfect Competition Slide 42 Using Discounts to Expand the Market Perfectly Discriminating Monopolist z Charging each buyer exactly their reservation price Economic surplus is maximized Consumer surplus is zero Economic surplus = producer surplus...
View Full Document
- Spring '08