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Module. Micro: Econ:. 27. 63. Price Discrimination. KRUGMAN'S MICROECONOMICS for AP*. Margaret Ray and David Anderson. What you will learn in this Module :. The meaning of price discrimination. Why price discrimination is so prevalent when producers have market power.
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Module Micro: Econ: 27 63 Price Discrimination • KRUGMAN'S • MICROECONOMICS for AP* Margaret Ray and David Anderson
What you will learnin thisModule: • The meaning of price discrimination. • Why price discrimination is so prevalent when producers have market power.
What is Price Discrimination? Charging different price to different consumers for the same product.
Price Discrimination Lenny’s is a local restaurant famous for their “Slam Grand” breakfasts. There are only two market segments that enjoy the Slam Grand: senior citizens and college students. Assume that: 1) Lenny’s MC=$2 2) There are 100 seniors willing to pay $4. 3) There are 100 college students willing to pay $8.
Elasticity and Price Discrimination Why are some consumers not as willing or able to pay for a product? Hint: It has to do with differences in price elasticity of demand.
Perfect Price Discrimination Perfect price discrimination: each consumer is charged exactly his/her maximum willingness to pay.