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Unformatted text preview: degree price discrimination, that is, he can offer a menu f .x A ;t A /;.x B ;t B / g of quantity / total price combinations and the consumer is free to choose any combi-nation in the menu. What is the prot-maximizing menu? (e) Suppose now that the monopolist knows each consumers type, so he can charge different prices to different consumers. However, the monopolist is not allowed to charge any consumer different prices for different units of the good. That is, the monopolist can charge different unit prices to different consumers, but any given consumer pays the same unit price irrespective of the number of units he buys (third degree price discrimination). What is the price that the monopolist is going to charge each of the two consumer? How much are they going to consume? Interpret the result in terms of the consumers price elasticities. 1...
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This note was uploaded on 03/01/2012 for the course ECON 121 taught by Professor Samuelson during the Spring '09 term at Yale.
- Spring '09