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 87 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?

In inpatient settings, adverse drug events account for an estimated one in three of all hospital adverse events. They affect approximately 2 million hospital stays every year, and prolong hospital stays by between one and five days.

Did you know?

Adult head lice are gray, about ? inch long, and often have a tiny dot on their backs. A female can lay between 50 and 150 eggs within the several weeks that she is alive. They feed on human blood.

Did you know?

Parkinson's disease is both chronic and progressive. This means that it persists over a long period of time and that its symptoms grow worse over time.

Did you know?

Serum cholesterol testing in adults is recommended every 1 to 5 years. People with diabetes and a family history of high cholesterol should be tested even more frequently.

Did you know?

More than 4.4billion prescriptions were dispensed within the United States in 2016.

The Hepatic Portal Blood Supply The liver receives water, minerals, and nutrients from the digestive The Hepatic Portal Blood Supply The liver receives water, minerals, and nutrients from the digestive
How Orbital Eccentricity Changes the Amount of Solar Radiation Earth Receives How Orbital Eccentricity Changes the Amount of Solar Radiation Earth Receives
Using the voltmeter leads from a starting and charging test unit to measure the voltage drop ... Using the voltmeter leads from a starting and charging test unit to measure the voltage drop ...
A Chrysler electronic ignition distributor. This unit is equipped with a vacuum advance mechanism ... A Chrysler electronic ignition distributor. This unit is equipped with a vacuum advance mechanism ...
How to evaluate angles using cosine, special triangles, the unit circle (Part 2) How to evaluate angles using cosine, special triangles, the unit circle (Part 2)
"The Department of Agriculture came out today with its prediction for food price "The Department of Agriculture came out today with its prediction for food price
Video: Resting membrane potential - electrical polarity and maintenance requirements

For a complete list of videos, visit our video library