What is price discrimination and how is it used to increase a monopoly's profit?
What will be an ideal response?
Price discrimination is the practice of selling different units of a good or service for different prices. To practice price discrimination, a monopoly must be able to: i) identify and separate different buyer types, and ii) sell a product that cannot be resold. The key idea to price discrimination is to charge different consumers different prices, according to their willingness to pay for the good. This transfers potential consumer surplus under the single-price scenario into producer surplus, raising the monopoly's profit.
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Describe what has happened to state obesity rates in the United States since 1994
What will be an ideal response?
If the income of buyers increases and a company maintains the same price, what is the most likely impact on quantity sold? Explain. Draw a graphical display of the result.
What will be an ideal response?
Wild Woman's Wild Wilderness Adventures sells 1,000 vacation packages each year. The average total cost of the packages is $450 and each package sells for $770 . Annual profit is
a. $230 b. $320 c. $2,300 d. $320,000 e. $3.2 million
Comparing the US to other countries ranked by inequality,
a. the US has a less equal distribution of income than some countries, but a more equal distribution of income than others. b. the US has one of the most equal distributions of income. c. the US has one of the least equal distributions of income. d. the US has a more equal distribution of income than other economically advanced countries such as Japan, Germany, and France.