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  • Lab8 - 203 - 2023 Exercise

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    This document contains questions for an economics lab assignment on price discrimination. The questions ask students to: (1) calculate the profit of a firm that can perfectly price discriminate compared to setting a single price, given demand and cost functions; (2) show graphically why single-price monopoly is inefficient; and (3) explain how price discrimination solves the welfare loss problem of monopoly but also describe the downside to this approach.

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    lab8_203_2023 Exercise (9) IN UVIC

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    lab8_203_2023 Exercise (9)

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    This document contains questions for an economics lab assignment on price discrimination. The questions ask students to: (1) calculate the profit of a firm that can perfectly price discriminate compared to setting a single price, given demand and cost functions; (2) show graphically why single-price monopoly is inefficient; and (3) explain how price discrimination solves the welfare loss problem of monopoly but also describe the downside to this approach.

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    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
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    9 views1 page

    Lab8 - 203 - 2023 Exercise

    Uploaded by

    hongsik kim
    This document contains questions for an economics lab assignment on price discrimination. The questions ask students to: (1) calculate the profit of a firm that can perfectly price discriminate compared to setting a single price, given demand and cost functions; (2) show graphically why single-price monopoly is inefficient; and (3) explain how price discrimination solves the welfare loss problem of monopoly but also describe the downside to this approach.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
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    Economics 203: Intermediate Microeconomics I

    Questions #8
    Price Discrimination

    Name:____________________

    Student #:_________________

    Lab Section: ______________

    Lab #8: Price Discrimination

    1) If the firm facing the demand curve P = 10 - Q has zero marginal costs and is a perfect
    price discriminator instead of a single price monopolist, and fixed costs are 12. (4 Marks)
    a) What is the profit (loss) of the firm?
    b) What is the profit (loss) of the firm if this is a single priced firm and discrimination
    is not allowed?

    2) Show graphically why economists refer to single-price monopoly market structure as


    inefficient. (3 Marks)

    3) Explain why price discrimination solves the welfare loss problem of monopoly, but then
    describe the downside of solving the welfare loss problem this way. (3 Marks)

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