week 8 Flashcards
what is price discrimination
different customers pay different prices for the same good
why does D slope down?
- people differ in their willingness to pay or max price a customer will pay to purchase one unit
- people may buy multiple units but demand reflects declining marginal value for good
what is first degree price discrimination?
selling each unit of output at a price equal to buyer’s willingness to pay
D=MR
what does a non-discriminating monopolist look like?
for non-discriminating monopolist, where is CS?
for non-discriminating monopolist, where is PS?
what is CS for discriminating monopolist, what about PS?
what is second degree price discrimination?
example of second degree price discrimination
graphs for students and adults for 3rd degree price discrimination
what is 3rd degree price discrimination
exampel of 3rd degree price discrimination
type of market structure
what is product differentiation
what are 4 features of a monopolistically competitive industry?
in the SHORT run, MC firms can make a positive profit if
in LR
in short run, MC firms makes a negative profit if
in long run,
show MC firms making positive profit in short run
show MC firms making negative profit in short run
what happens to monopolistic competition in the long run?
two characteristics of long run equilibrium for monopolistic competitive industry
show LR equilibrium for MC industry
compared to perfect competition, monopolistic competition leads to
cost and benefit of Monopolistic competitive firms
cost: inefficient qty
benefit: product variety
what does LR equlibrium look like for monopolistic competition and a typical firm in perfect competition
