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Suppose now that Clomper's is able to perfectly price discriminate that is, it knows each consumer's willingness to pay for a pair of Stompers and is able to charge each consumer precisely that amount. On the following graph, use the black point (plus symbol) to indicate the profit-maximizing quantity sold and the lowest price at which the firm sells its boots. Next, use the purple points (diamond symbol) to shade the profit, the green points (triangle symbol) to shade the consumer surplus, and the black points (plus symbol) to shade the deadweight loss in this market with perfect price discrimination. (Note: If you decide that consumer surplus, profit, or deadweight loss equals zero, indicate this by leaving that element in its original position on the palette.) ? PRICE(Dollars per pair of Stompers) 100 90 80 70 60 50 40 30 20 10 0 MC = ATC Demand 0 200 400 600 800 1000 1200 1400 1600 1800 2000 QUANTITY (Pairs of Stompers) Monopoly Outcome Profit A Consumer Surplus Deadweight Loss Consider the welfare effects when the industry operates under a monopoly and cannot price discriminate versus when it can price discriminate. Statement Clomper's produces a quantity less than the efficient quantity of Stompers. Total surplus is maximized. There is deadweight loss associated with the profit-maximizing output. Complete the following table by indicating under which market conditions each of the statements is true. (Note: If the statement isn't true for either single-price monopolies or perfect price discrimination, leave the entire row unchecked.) Check all that apply. Single-price Monopoly Perfect Price Discrimination

Suppose now that Clomper's is able to perfectly price discriminate that is, it knows each consumer's willingness to pay for a pair of Stompers and is able to charge each consumer precisely that amount. On the following graph, use the black point (plus symbol) to indicate the profit-maximizing quantity sold and the lowest price at which the firm sells its boots. Next, use the purple points (diamond symbol) to shade the profit, the green points (triangle symbol) to shade the consumer surplus, and the black points (plus symbol) to shade the deadweight loss in this market with perfect price discrimination. (Note: If you decide that consumer surplus, profit, or deadweight loss equals zero, indicate this by leaving that element in its original position on the palette.) ? PRICE(Dollars per pair of Stompers) 100 90 80 70 60 50 40 30 20 10 0 MC = ATC Demand 0 200 400 600 800 1000 1200 1400 1600 1800 2000 QUANTITY (Pairs of Stompers) Monopoly Outcome Profit A Consumer Surplus Deadweight Loss Consider the welfare effects when the industry operates under a monopoly and cannot price discriminate versus when it can price discriminate. Statement Clomper's produces a quantity less than the efficient quantity of Stompers. Total surplus is maximized. There is deadweight loss associated with the profit-maximizing output. Complete the following table by indicating under which market conditions each of the statements is true. (Note: If the statement isn't true for either single-price monopolies or perfect price discrimination, leave the entire row unchecked.) Check all that apply. Single-price Monopoly Perfect Price Discrimination

Exploring Economics
Exploring Economics
8th Edition
ISBN:9781544336329
Author:Robert L. Sexton
Publisher:Robert L. Sexton
Chapter13: Monopoly And Antitrust
Section: Chapter Questions
Problem 13P
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Suppose now that Clomper's is able to perfectly price discriminate that is, it knows each consumer's willingness to pay for a pair of Stompers and is able to charge each consumer precisely that amount. On the following graph, use the black point (plus symbol) to indicate the profit-maximizing quantity sold and the lowest price at which the firm sells its boots. Next, use the purple points (diamond symbol) to shade the profit, the green points (triangle symbol) to shade the consumer surplus, and the black points (plus symbol) to shade the deadweight loss in this market with perfect price discrimination. (Note: If you decide that consumer surplus, profit, or deadweight loss equals zero, indicate this by leaving that element in its original position on the palette.) ? PRICE(Dollars per pair of Stompers) 100 90 80 70 60 50 40 30 20 10 0 MC = ATC Demand 0 200 400 600 800 1000 1200 1400 1600 1800 2000 QUANTITY (Pairs of Stompers) Monopoly Outcome Profit A Consumer Surplus Deadweight Loss Consider the welfare effects when the industry operates under a monopoly and cannot price discriminate versus when it can price discriminate. Statement Clomper's produces a quantity less than the efficient quantity of Stompers. Total surplus is maximized. There is deadweight loss associated with the profit-maximizing output. Complete the following table by indicating under which market conditions each of the statements is true. (Note: If the statement isn't true for either single-price monopolies or perfect price discrimination, leave the entire row unchecked.) Check all that apply. Single-price Monopoly Perfect Price Discrimination
Transcribed Image Text:Suppose now that Clomper's is able to perfectly price discriminate that is, it knows each consumer's willingness to pay for a pair of Stompers and is able to charge each consumer precisely that amount. On the following graph, use the black point (plus symbol) to indicate the profit-maximizing quantity sold and the lowest price at which the firm sells its boots. Next, use the purple points (diamond symbol) to shade the profit, the green points (triangle symbol) to shade the consumer surplus, and the black points (plus symbol) to shade the deadweight loss in this market with perfect price discrimination. (Note: If you decide that consumer surplus, profit, or deadweight loss equals zero, indicate this by leaving that element in its original position on the palette.) ? PRICE(Dollars per pair of Stompers) 100 90 80 70 60 50 40 30 20 10 0 MC = ATC Demand 0 200 400 600 800 1000 1200 1400 1600 1800 2000 QUANTITY (Pairs of Stompers) Monopoly Outcome Profit A Consumer Surplus Deadweight Loss Consider the welfare effects when the industry operates under a monopoly and cannot price discriminate versus when it can price discriminate. Statement Clomper's produces a quantity less than the efficient quantity of Stompers. Total surplus is maximized. There is deadweight loss associated with the profit-maximizing output. Complete the following table by indicating under which market conditions each of the statements is true. (Note: If the statement isn't true for either single-price monopolies or perfect price discrimination, leave the entire row unchecked.) Check all that apply. Single-price Monopoly Perfect Price Discrimination
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