Monopoly Behaviour Flashcards
1
Q
What is first-degree price discrimination
A
sell each unit to the individual that is willing to pay the amount, at the highest price
2
Q
When will the produce sell during first-degree price discrimination
A
the producer sells each unit of the good at the maximum price it’ll command, which yields it the maximum possible profit by producing P = MC
3
Q
What is second-degree price discrimination
A
the price per-unit of output is not constant but depends on how much you buy
4
Q
What is third-degree price discrimination
A
monopolist sells to different people at different prices but every unit sold to a given group of individuals is sold at the same price
