tailieunhanh - Câu hỏi đánh giá môn Kinh tế vĩ mô bằng tiếng Anh- Chương 11

Tham khảo tài liệu 'câu hỏi đánh giá môn kinh tế vĩ mô bằng tiếng anh- chương 11', kinh tế - quản lý, kinh tế học phục vụ nhu cầu học tập, nghiên cứu và làm việc hiệu quả | Chapter 11 Pricing with Market Power CHAPTER 11 PRICING WITH MARKET POWER REVIEW QUESTIONS 1. Suppose a firm can practice perfect first-degree price discrimination. What is the lowest price it will charge and what will its total output be When the firm is able to practice perfect first-degree price discrimination each unit is sold at the reservation price of each consumer assuming each consumer purchases one unit. Because each unit is sold at the consumer s reservation price marginal revenue is simply the price of the last unit. We know that firms maximize profits by producing an output such that marginal revenue is equal to marginal cost. For the perfect price discriminator that point is where the marginal cost curve intersects the demand curve. Increasing output beyond that point would imply that MR MC and the firm would lose money on each unit sold. For lower quantities MR MC and the firm should increase its output. 2. How does a car salesperson practice price discrimination How does the ability to discriminate correctly affect his or her earnings The relevant range of the demand curve facing the car salesperson is bounded above by the manufacturer s suggested retail price plus the dealer s markup and bounded below by the dealer s price plus administrative and inventory overhead. By sizing up the customer the salesperson determines the customer s reservation price. Through a process of bargaining a sales price is determined. If the salesperson has misjudged the reservation price of the customer either the sale is lost because the customer s reservation price is lower than the salesperson s guess or profit is 160 Chapter 11 Pricing with Market Power lost because the customer s reservation price is higher than the salesperson s guess. Thus the salesperson s commission is positively correlated to his or her ability to determine the reservation price of each customer. 3. Electric utilities often practice second-degree price discrimination. Why might this improve .