This topic contains a solution. Click here to go to the answer
« previous next »

Author Question: A perfect price discriminator receives a price equal to marginal revenue for each unit. What will ... (Read 92 times)

bobbysung

  • Hero Member
  • *****
  • Posts: 519
on: Jul 1, 2018
A perfect price discriminator receives a price equal to marginal revenue for each unit.
 
  What will be an ideal response?

Question 2

A perfect-price-discriminating monopoly maximizes social welfare as measured by the sum of producer surplus plus consumer surplus.
 
  What will be an ideal response?


Related Topics

Need homework help now?

Ask unlimited questions for free

Ask a Question
Marked as best answer by a Subject Expert

frejo

  • Sr. Member
  • ****
  • Posts: 349
Reply #1 on: Jul 1, 2018
Answer to Question 1

True. A perfect price discriminator sets the price of each unit sold equal to the reservation price of the good. The price equals the maximum price a consumer will pay for a given unit. Thus, the price of each unit will equal the marginal revenue of each unit.

Answer to Question 2

True. Unlike the competitive market, however, social welfare is all producer surplus. There is no consumer surplus. Thus, while a perfect-price-discriminating monopoly is efficient, many are troubled by it based upon distributional issues.


bobbysung

  • Hero Member
  • *****
  • Posts: 519
Reply #2 on: Jul 1, 2018
Thank you


frejo

  • Sr. Member
  • ****
  • Posts: 349
Reply #3 on: Jul 1, 2018
No problemo


« previous next »
 

Did you know?

When intravenous medications are involved in adverse drug events, their harmful effects may occur more rapidly, and be more severe than errors with oral medications. This is due to the direct administration into the bloodstream.

Did you know?

About 600,000 particles of skin are shed every hour by each human. If you live to age 70 years, you have shed 105 pounds of dead skin.

Did you know?

The newest statin drug, rosuvastatin, has been called a superstatin because it appears to reduce LDL cholesterol to a greater degree than the other approved statin drugs.

Did you know?

Earwax has antimicrobial properties that reduce the viability of bacteria and fungus in the human ear.

Did you know?

Common abbreviations that cause medication errors include U (unit), mg (milligram), QD (every day), SC (subcutaneous), TIW (three times per week), D/C (discharge or discontinue), HS (at bedtime or "hours of sleep"), cc (cubic centimeters), and AU (each ear).

PIC PERFECT PIC PERFECT
Failure of the Equal Rights Amendment, 1972–1982 Failure of the Equal Rights Amendment, 1972–1982
How to factor a perfect square trinomial How to factor a perfect square trinomial
Drug A is more potent than Drugs B and C. Drugs A and C have equal efficacy because both drugs have ... Drug A is more potent than Drugs B and C. Drugs A and C have equal efficacy because both drugs have ...
Planet Z-34 has a mass equal to 1/3 that of Earth, a radius equal to 1/3 that of Earth, and an ... Planet Z-34 has a mass equal to 1/3 that of Earth, a radius equal to 1/3 that of Earth, and an ...
Orientation and structure of a nephron, the functional unit of the kidney. Orientation and structure of a nephron, the functional unit of the kidney.
Video: Sickle Cell Anemia

For a complete list of videos, visit our video library