T5 - Price Discrimination 2.0

Question 1

what is price discrimination

Answer 1

when firms sell the same good to different groups of consumers for different prices

Question 2

what is first degree price discirmination

Answer 2

charging the max price consumers are willing and able to pay

Question 3

what is second degree price discrimination

Answer 3

different prices based on quantity or chocies

Question 4

what si third degree price discrimianton

Answer 4

diff prices for different segments of the market

Question 5

examples of different demographics in 3rd degree price disc

Answer 5

age
incoem group
time of use

Question 6

conditions neccessary for price discrimiantion

Answer 6

price making ability
ifnormation to seprate the market (diff peds)
be able to prevent reseale and seperate the market
low admin too seperate the market

Question 7

what is proper term for resale into sup markets

Answer 7

price seepage

Question 8

are there any differences in costs of production for price discrimiantion

Answer 8

no

Question 9

how cna firms haev price setting ability

Answer 9

monopoly power

Question 10

with regards to ifnoramtion what must firms haev it on

Answer 10

be abel to sepertae teh arket into diferents price elasticicties of demand

Question 11

what happens with consuemr surplus in first degree price disc

Answer 11

all of consumer surplsu turned to monopoly profit

Question 12

examples of second degree price discrimination

Answer 12

loyalty cards for frequent buyers
colelction fo coupons from maagazines
eneergy is cheaper after high qty of units boughts

Question 13

why may 2nd degree pd be called indirect pd

Answer 13

as consuemrs have a chocie as to the price they are paying

Question 14

why are soem chocies cheaper in 2nd degree pd

Answer 14

as they impose costs to consumers

Question 15

exampels of costs imposed on consumers in 2nd dgeree

Answer 15

buying in bulk
unsociable hours
collecting coupons

Question 16

when does 3rd degree price discrimination occur

Answer 16

when a firm is abel to segement the market into different peds

Question 17

econ dal cons of pd

Answer 17

alloactive innefficiny
inequality
anti comeptitive pricig

Question 18

econ dal pros of pd

Answer 18

dynamic effienc
economies of scale
soem poeple benefit
cross subsidisation of proft

Question 19

ahmad pros of pd to the firm

Answer 19

firms offer unprofitabel srvices
spread demand
avoid congenstion
inc profit
eco of scale
effinecint use of infrastructure
better use of space

Question 20

how si better use of spcae a pro of pd for firms

Answer 20

able to clear execss supply and existign stocks quickly to cater and stock newer shit thtas in demand

Question 21

how is effecient use of infrasrtcuture a pro to firms

Answer 21

those with high fixed costs gernally have minimal mc , so the cost to add oen more consumer isnt much menaign they can turn that added revenue into profit or cover new costs

Question 22

cons of price discrimiantion firms mr ahmad

Answer 22

admin costs

Question 23

mr ahamds adv of prd

Answer 23

beenfits to soem groups
enables felxibility
geenates psotiiev externalities

Question 24

how does pd enabel flxibility for xonusmers

Answer 24

consuemrs are abel to match pruchasign and shopping to them

Question 25

exampels of flxibility in pd

Answer 25

elderly peopel beenfitign from early bird prices

Question 26

exampels of hwo pd gens psotitive externalties

Answer 26

say private schools offerign discoutned priced places to those who cnanot afford it

Question 27

disadvantages of pd to consuemrs

Answer 27

exploitation fo captive markets fall in consumer suprlus unfair

Question 28

examples of explotiation fo captive markets for ernergy prices

Answer 28

where esxistign customers pay higher prices whic subsidises discoutns for new consumers

Question 29

limtiations of pd

Answer 29

the condtions to be abel to price discrimiante may nto eb fully met , meanign there is a limit to the extent to whcih diff rpices can be set

Question 30

draw backs of frist degree pd

Answer 30

time consumign difficutl to do for most businesses

Question 31

what must companies be abel to do to avoid elimiantion fo profits

Answer 31

avoid resale

Question 32

how does spread demand help firms in pd

Answer 32

as pd encorages peopel to travel at unpopular times say, meanign early in mronign, so not too many peopel in palce at once

Question 33

how can markets be kept seprate in pd

Answer 33

by time physical distance nature of use

Question 34

why cna price disc be costsly

Answer 34

as tryign to seprate the market means mroe enforcement and shit that they are kept serpate ie added proccesses to identify tickets to consuemrs, or extra inspectors to chekc such things

Question 35

how can price seepage and resale be prevented

Question 36

benefits of 1st degree

Answer 36

profit and max producer surplus

Question 37

what isnt needed to be doen for first degree pd

Answer 37

reduce the price of all units sold to increase sales

Question 38

issues with first degree

Answer 38

seller would need to seeprate maret for individual deals sellers would have to anticipate what customers would eb willing to pay

Question 39

types of second degree

Answer 39

bulk selling offers last minute tickets for certian products gettign rid of excess when lwo demand peak adn off peak sales

Question 40

what situation woudl first degree pd be used

Answer 40

buyign a car

Question 41

when may 3rd degree pd be seen

Answer 41

studnets and pensioner discounts booking in advance

Question 42

easiest way to knwowhat firms are doign 3rd degree pd on

Answer 42

look at teh good look at who consumes it look at why it may be inealstci demadn on it look at why elastic demand boom

Question 43

what is main exampel fo 2nd degree

Answer 43

bulk offers 2 for 1 offers coupons loaylt cards

Question 44

howa re loyalty cards a form of secodn degree pd

Answer 44

as more consuemrs buy they may end up gettign the next product free ro at a high discount

Question 45

how can price discirmiantion act as a bte

Answer 45

firms that can afford may offer better discoutns, lwoer prices, capturign greater market share

Question 46

ways to prevent resale

Answer 46

id on tickets software businesses requiring school emails students showign id cards