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QUESTION 2 Explain and discuss how monopoly pricing targets to capture consumer surplus. In your answer cover the followings: a) What kind of consumer behavior

QUESTION 2

Explain and discuss how monopoly pricing targets to capture consumer surplus. In your answer cover the followings:

a) What kind of consumer behavior is second-degree price discrimination based on? (6 marks) Support your answer with relevant examples. (4 marks)

b) Explain the role of price elasticity of demand in applying third-degree price discrimination. (6 marks) Use appropriate graphs to support your answer. (4 marks)

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