Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

You are the manager of a monopoly that sells a product to two groups of consumers in different parts of the country. Analysts at your

You are the manager of a monopoly that sells a product to two groups of consumers in different parts of the country. Analysts at your firm have determined that group 1's elasticity of demand is 3, while group 2's is 4. Your marginal cost of producing the product is $20. a. Determine your optimal markups and prices under third-degree price discrimination. Instructions: Enter your responses rounded to two decimal places. Markup for group 1: 1.25 Numeric Response 1.Edit Unavailable. 1.25 incorrect.

Price for group 1: $ 50.00 Numeric Response 2.Edit Unavailable. 50.00 incorrect.

Markup for group 2: 1.50 Numeric Response 3.Edit Unavailable. 1.50 incorrect.

Price for group 2: $ 60.00 Numeric Response 4.Edit Unavailable. 60.00 incorrect. b. Which of the following are necessary conditions for third-degree price discrimination to enhance profits. Instructions: In order to receive full credit, you must make a selection for each option. For correct answer(s), click the box once to place a check mark. For incorrect answer(s), click twice to empty the box.

check all that apply

  • There are two different groups with different (and identifiable) elasticities of demand.
  • At least one group has elasticity of demand greater than 1 in absolute value.
  • At least one group has elasticity of demand less than one in absolute value.
  • We are able to prevent resale between the groups.

PrevQuestion 4 of 10 Total4 of 10Visit question mapNext

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Operations Management Creating Value Along the Supply Chain

Authors: Roberta S. Russell, Bernard W. Taylor

7th Edition

9781118139523, 0470525908, 1118139526, 978-0470525906

More Books

Students also viewed these General Management questions

Question

1. Signs and symbols of the map Briefly by box ?

Answered: 1 week ago

Question

Types of physical Maps?

Answered: 1 week ago

Question

Explain Intermediate term financing in detail.

Answered: 1 week ago

Question

Types of cultural maps ?

Answered: 1 week ago