Price Discrimination Graph Segmented MArkets Calculating Bundle Price Lower p

Price discrimination graph segmented markets

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Price Discrimination Graph; Segmented MArketsCalculating Bundle Price (Lower p)AmandaYvonneWord$100$40Excel$20$90Office =Word + Excel$120$130Bundling increases efficiency^Especially when FC are high, MC are lowIligopoly; industry dominated by small # firmsCartels; Oligopoly that acts as a monopolistGame Theory; Decision making in any situation that is interactive.Competitive Market; in constant cost industry = long term earnszero economic profitCartels Collapse; 1)Cheating 2)new entrants/Demand response3)Govn. Prosecution/regulationIncentives toCheat(Cartel): produce more than said, make profitswhile others lose out.Cheating member bears 1/n of loss, gains all benefits.Payoff Chart^ (Equilibrium Shaded)Cheating Dilemma; one or both benefits, one or both lose outDominant Strategy; Highest Payoff, regardless of other playersdecision.Prisoners Dilemma; Both in self‐interest, neither interested inincome. (negative counterpart of invisible hand)Repeated Interaction; work together over time= more likely tocooperate. | One time Deal=more likely to cheat.Tit for Tat; doing what partner did last time.Tacit Collusion: Collusion without explicit agreement orcommunication.

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