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1) In each of the following cases, answer whether the firm in question is a. Practicing first-degree price discrimination. b. Practicing second-degree price discrimination. c.

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1) In each of the following cases, answer whether the firm in question is a. Practicing first-degree price discrimination. b. Practicing second-degree price discrimination. c. Practicing third-degree price discrimination. d. Not practicing price discrimination. i) A fast-food restaurant offers a burger for $1. You can add small fries and a drink for another $1. For an extra 50c, you can double the amount of fries and double the size of your drink. ii ) A movie theater offers discounted tickets to students. iii) A plumbing company charges $250 to clean a drain and $2000 to completely replace a drain. 2) For each price level depicted in the following diagram, answer these two questions: a. Is the firm making a profit? b. Should the firm shut down? MC AC MC AVC P1 P2 P3

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