Exam 12: Product Pricing With Monopoly Power

Under first-degree price discrimination,the marginal revenue curve:

The following figure shows the downward sloping demand and marginal revenue [MR] curves of a monopolist.The MR curve intersects the marginal cost [MC] curve at point B.MC is constant at the price level P₁. Figure 12-1 -Refer to Figure 12-1.If the monopolist perfectly price discriminates,profit will be equal to:

Within the context of price discrimination,explain why airlines charge higher fares to their customers during Christmas but offer significant discounts at other times of the year.

Under third-degree price discrimination,a producer makes profit by:

The following figure shows the downward sloping demand and marginal revenue [MR] curves and the upward sloping marginal cost [MC] curve of a monopolist. Figure 12-2 -Refer to Figure 12-2.What will be the consumer surplus when the monopolist practices first-degree price discrimination?

With block pricing,firms differentiate price according to _____.

Why is it difficult to implement first-degree price discrimination?

Park and Fly,a chain that operates off-terminal parking lots near major airports in several U.S.cities,has a "frequent-parker" program that offers customers a week's free parking after they have paid for 35 days.Which of the following types of price discrimination is the company practicing?

Which of the following price discrimination strategies allows a monopolist to distribute a product/service most efficiently between two periods of time?

With perfect price discrimination,a monopolist:

Traffic congestion can be controlled by charging fees for the use of roadways.The fees vary with the demand for roadways at different hours of the day.It is usually very high during the business hours and low at other times of the day.This form of pricing strategy is referred to as:

The efficiency gains from peak-load pricing depend largely upon:

Which of the following is the closest example of perfect price discrimination?

In case of third-degree price discrimination in two markets with differing demand elasticities,price will:

The local zoo has a pricing policy in which senior citizens pay a lower price than younger adults.This policy is:

Which of the following is the closest example of block pricing?

When airlines charge different fares for seats on the same flight depending on how far in advance an airline ticket has been purchased,it is using a(n)_____ strategy.

A popular restaurant chain,Grill n' Chill,offers its customers a 0.5% discount on a bill of $100-$200,a 1% discount on a bill of $201-$300,a 1.5% discount on a bill of $301-$400,and so on.Thus,customers enjoy a higher discount when they order more food.Which of the following forms of price discrimination is being practiced by this restaurant chain?

The following figure shows the indifference curves U₁ and U₂ of a consumer choosing between hours devoted at a tennis club and other goods.All consumers in this market have identical demand curves.IZ is the original budget line of a representative consumer,which shifts to AB when the club begins to charge an entry fee. Figure 12-3 -Refer to Figure 12-3.What is the amount of entry fee the club is charging the consumer?

The following figure shows the downward sloping demand and marginal revenue [MR] curves of a monopolist.The MR curve intersects the marginal cost [MC] curve at point B.MC is constant at the price level P₁. Figure 12-1 -Refer to Figure 12-1.If the monopolist cannot price discriminate,profit will be equal to: