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Author Question: Why do price discriminating firms often offer lower prices to children and elderly? (Read 67 times)

SO00

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on: Apr 19, 2019

Question 1

A monopolist who has a horizontal 
ATC schedule and perfectly price discriminates


◦ leaves buyers a decreased but still positive amount of consumer surplus.
◦ increases the amount of consumer surplus that is lost to the buyers and not gained by the monopolist.
◦ appropriates all consumer surplus as profit.
◦ does not change the amount of consumer surplus that buyers had before the monopolist perfectly price discriminated.

Question 2

Why do price discriminating firms often offer lower prices to children and elderly?


◦ They have a lower willingness to pay than other consumers.
◦ Their demand for goods and services tends to be less elastic than other consumers.
◦ Such a strategy lowers the costs of the firm.
◦ These firms are more interested in equity than profit maximizing.
Principles of Economics ¦ Case, Fair, Oster ¦ 12th Edition
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Marked as best answer by SO00 on Apr 19, 2019

Moriaki

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Reply #1 on: Apr 19, 2019
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SO00

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Reply #2 on: Apr 19, 2019
Thank you!


Moriaki

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Reply #3 on: Apr 19, 2019
Always glad to help...


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