ECON 5133 Managerial Economics

 

1. A firm charges different prices to two groups. Would the firm ever operate where it was suffering a loss from its sales to the low-price group? Explain
2. A monopoly sells its good in the United States, where the elasticity of demand is -2, and in Japan, where the elasticity of demand is -5. Its marginal cost is $10. At what price does the monopoly sell its good in each country if resale is impossible?
3. Why are electronic textbooks likely to facilitate price discrimination by making it easier for textbook publishers to charge different prices in various countries?
4. Does a monopoly’s ability to price discriminate between two groups of consumers depend on its marginal cost curve? Why or why not? Consider two cases: (a) the marginal cost is so high that the monopoly is uninterested in selling to one group; and (b) the marginal cost is low enough that the monopoly wants to sell to both groups.
5. Provide at least three examples and discuss, illustrating how firms can use discounts while avoiding giving rebates to consumers with a high willingness to pay. Please provide your responses in a word document. Your response to each question should be 300-350 words in length. Make sure to follow APA style 7th edition format and include two external resources.