Explain why a firm can earn more profit by price discrimination than from setting a uniform price
What will be an ideal response?
First, price discrimination allows a firm to charge a higher price to customers who are willing to pay more than the uniform price. The firm captures more of the consumer surplus. Second, a price-discriminating firm can sell to additional customers who were unwilling to pay the uniform price.
You might also like to view...
Double markup problems arise because
a. upstream firms have no market power b. downstream firms have no market power c. upstream and downstream products are complementary in demand d. upstream and downstream firm's pricing decisions tend to increase the demand for the other product
Refer to the graph shown.
Suppliers producing L will spend up to area(s) ________ to limit output to L.
A. A B. B C. A and B D. B and D
Excess quantity demanded may result from
A. a government-imposed maximum price below market equilibrium. B. a government-imposed minimum price above market equilibrium. C. an oversupply of output. D. technological progress.
A firm producing a relatively large quantity before any rivals have entered the market, is an example of first-mover advantage
What will be an ideal response?