445 Ch 6

445 Ch 6 - 6.1 FirstDegree Price Discrimination With...

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6.1 First-Degree Price Discrimination: With first-degree price discrimination marginal revenue is equal to price.  First-degree price discrimination allows you to extract the entire surplus that selling a  product generates The quantity demanded equates marginal benefit with the marginal cost to the  consumer of buying the last unit where, marginal cost to the consumer is just the price  for that last unit.  With Third-degree discrimination, there is no difference in pricing between first unit  bought and the last unit bought.  The average price to each type of customer is the same under either first or third  degree price discrimination. 6.2 Second-Degree Price Discrimination      or      Menu Pricing     Second-degree PD  is usually implemented by offering quantity discounts targeted to  different consumer types. This is a variant of the block-pricing strategy, 
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This note was uploaded on 02/23/2012 for the course ECON 445 taught by Professor Mcmanus during the Summer '08 term at UNC.

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