QUESTION 3

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

c) What is the role of marginal utility in second-degree price discrimination? (6 marks) Support your answer with a relevant example. (4 marks)

d) How two markets (or groups of consumers) should be different for a monopoly to successfully use a third-degree price-discrimination strategy? (6 marks) Use an appropriate graph to support your answer. (4 marks)