Exam 12: Capturing Surplus

Let a monopolist face consumer group A with inverse demand P_A = 100 - 2Q_A and consumer group B with inverse demand P_B = 80 - Q_B?.The monopolist can conduct third degree price discrimination,but faces a capacity constraint that Q_A + Q_B ≤ 100.What will be the amount supplied to each of the customer groups?

**Reference: Use the following table to answer the next three questions (46-48). -*If the firm bundles the products,what single price should the firm charge for the bundle to maximize profit?

An example of first-degree price discrimination would occur

With ________ degree price discrimination,the firm identifies different consumer groups or segments in a market and charges each group a different price.

Bundling can increase the seller's profits when customers have different _______ for the two products and when the firm __________________.

Which of the following is a real-world example of first-degree price discrimination?

Which of the following statements regarding price discrimination is true?

Mixed bundling is sometimes the most profitable strategy for a firm

A computer manufacturer sells computers and monitors separately.This manufacturer also allows consumers to choose any type of computer and any type of monitor and sells the two components as a package.This manufacturer is engaging in a ____________ pricing strategy.

Which of the following is not a real-world example of second-degree price discrimination?

The firm's use of advertising is motivated

Which of the following is not a real-world example of third-degree price discrimination?

A block tariff is a form of

The conditions for capturing more surplus from price discrimination include

Let the inverse demand curve for a monopolist's product be P = 100 - 2Q and the marginal cost of production be constant at MC = 10.Suppose that the firm considers moving from a uniform pricing strategy to a two-block tariff where the first block provides 15 units at a price of P₁ = $70 and the second block provides an additional 15 units at a price of P₂ = $40.What is the average outlay schedule for the consumer?

Bundling is a form of

Advertising is an example of a firm's

When a movie theater charges a lower ticket price for senior citizens and/or students,the movie theater is engaging in

A monopolist faces inverse demand and has constant marginal cost If this monopolist changes from a policy of uniform pricing to a policy of first-degree price discrimination,deadweight loss will decrease by:

Which of the following statements regarding a monopoly's first-degree price discrimination is correct?