Once more, let us return to the yo yo market Consider one firm, YoHoo YoYo's YoHoo's production method means that is has constant marginal cost of $3 per yo yo YoHoo's marketing staff breaks its customers into 3 segments kids, with demand Pk 15 15Qk adults who never grew up, with demand Pa 15 5Qa clowns, with demand Pc 15 Qc If all of YoHoo's customers are lumped together, the total demand (the horizontal summation of those three demand curves) is P 15 Q a c are conceptual questions no calculation should be done The marketing staff try to implement an online auction, hoping to end up with perfect 3rddegree price discrimination (not segmenting customers) If they could do so successfully, what are the highest and lowest prices they would end up selling YoYos for Explain What would be PS CS DWL They quickly realize that that would be silly (unimplementable) in this case So, they decide to use good old fashioned 2nddegree price discrimination instead What prices should they charge each customer type How many will they sell to each type At the prices they decide to charge in part e , what are the elasticities of demand by the three types of customers answers make sense, given the prices you calculated that they should charge each type Explain One of the marketing people has a new idea two part pricing (2PP), within segments Assuming this could be done, calculate the entry fee, per YoYo price, PS, CS, and DWL for each of the three segments If they could not implement 2PP for the three segments separately, would you recommend that they use a single 2PP plan for all of their customers Explain in words (no calculation is required)

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Once more, let us return to the yo-yo market. Consider one firm, YoHoo YoYo's. YoHoo's production method means that is has constant marginal cost of

Once more, let us return to the yo-yo market. Consider one firm, YoHoo YoYo's. YoHoo's production method means that is has constant marginal cost of $3 per yo yo. YoHoo's marketing staff breaks its customers into 3 segments:

kids, with demand Pk = 15 - 15Qk
adults who never grew up, with demand Pa = 15 - 5Qa
clowns, with demand Pc = 15 - Qc
If all of YoHoo's customers are lumped together, the total demand (the horizontal summation of those three demand curves) is: P = 15 - Q.
a-c are conceptual questions; no calculation should be done.

The marketing staff try to implement an online auction, hoping to end up with perfect 3rddegree price discrimination (not segmenting customers). If they could do so successfully, what are the highest and lowest prices they would end up selling YoYos for? Explain. What would be PS? CS? DWL?
They quickly realize that that would be silly (unimplementable) in this case. So, they decide to use good old fashioned 2nddegree price discrimination instead. What prices should they charge each customer type? How many will they sell to each type?
At the prices they decide to charge in part e., what are the elasticities of demand by the three types of customers? answers make sense, given the prices you calculated that they should charge each type? Explain.
One of the marketing people has a new idea - two-part pricing (2PP), within segments. Assuming this could be done, calculate the entry fee, per YoYo price, PS, CS, and DWL for each of the three segments.
If they could not implement 2PP for the three segments separately, would you recommend that they use a single 2PP plan for all of their customers? Explain in words (no calculation is required).