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12.13: Discussion- Price Discrimination

Last updated

Oct 12, 2022
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- 12.12: Glossary- Monopoly
- 12.14: Outcome- Introduction to Monopolies

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Draw the graph for a monopoly with demand, marginal revenue, and marginal cost curves. Identify the profit-maximizing output level (Qm) and price (Pm).

Suppose the monopolist sells Qm units of output at the regular price and then puts the product on sale at a lower price, Ps. Show the new price and quantity. Identify the consumer surplus of the additional sales. What happens to the firm’s profits? Does price discrimination lead to a more efficient or less efficient outcome? Why or why not?

Discussion: Monopoly. Authored by: Steve Greenlaw and Lumen Learning. License: CC BY: Attribution

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