Monopoly pricing and price discrimination Flashcards
1
Q
How profit maximising output is determined
A
Marginal revenue= Marginal cost then set the price according to demand curve
2
Q
Price discrimination
A
Charge different consumers different price for goods produced at the same cost
3
Q
Conditions for price discrimination
A
- Market is separable
- Elasticities of demand of sub-markets are different
4
Q
Price fixing
A
Fix the price of products
5
Q
Sales and production quotas
A
Restrict market supply
6
Q
Joint boycott
A
Force not to trade with others
7
Q
Tie-in sales
A
Buyers required to buy another product when buying a product
8
Q
Bundling
A
Sell two or more goods together as a package
9
Q
Exclusive dealing
A
Required to deal with one supplier only
10
Q
Merger
A
Merge with other firms
11
Q
Harms to customers for anti competitive behaviours
A
- Higher market price
- Lack of choice
- Poor product quality
