Normally, monopolies charge the same price to all customers. But sometimes they are able to charge different prices to different buyers. Using the triangle drawing tool, indicate the area of the firm's profit if perfect price discrimination is possible. Label this region: 'Profit'. Note: Carefully follow the instructions above and only draw the required object. Price ($) 700- 650- 600- 550- 500- 450- 400- 350- 300- 250- 200- 150- 0 A Price Discriminating Monopolist 100 MR 200 300 Units of output MC = ATC 400 D 500

Normally, monopolies charge the same price to all customers. But sometimes they are able to charge different prices to different buyers. Using the triangle drawing tool, indicate the area of the firm's profit if perfect price discrimination is possible. Label this region: 'Profit'. Note: Carefully follow the instructions above and only draw the required object. Price ($) 700- 650- 600- 550- 500- 450- 400- 350- 300- 250- 200- 150- 0 A Price Discriminating Monopolist 100 MR 200 300 Units of output MC = ATC 400 D 500

Managerial Economics: A Problem Solving Approach

5th Edition

ISBN:9781337106665

Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor

Publisher:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor

Chapter14: Indirect Price Discrimination

Section: Chapter Questions

Problem 14.2IP

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