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price discrimination

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2. This question is based on Figure 2.

a. If the Bijou did not engage in 3rd degree price discrimination, then the price of a ticket would be $______ , there would be _______ kid patrons and ______ adult patrons and total revenue from the sale of tickets would be $_______.

b. If the Bijou did engage in 3rd degree price discrimination, then the price of a kid ticket would be $_____, the price of an adult ticket would be $______.

c. Other things being equal, the practice of price discrimination would increase the total surplus (TS) if area was greater than area .

d. By practicing price discrimination, the Bijou can increase its profits by $______.

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a. If the Bijou did not engage in 3rd degree price discrimination, then the price of a ticket would be $4______ , there would be 10_______ kid patrons and 28______ adult patrons and total revenue from the sale of tickets would be $152_______.

Without third degree price discrimination, Bijou will charge the same price from adults and kids. Thus we need to look at the total demand and MR for the total curve. The ...

Solution Summary

Effects of price discrimination are shown.

$2.19
See Also This Related BrainMass Solution

Social Welfare Implications of Price Discrimination

1) Price discrimination is often defended on the basis of equity (Charge less for the poor than the rich!). Is this the only rationale for price discrimination?

2) If a market price is determined by a dominant price leader, what happens to the price (gets higher or lower) if the number of the followers increase? (First review Figure 11.2 on page 504.)

(See attached diagram).

3) What is transfer pricing? Give an example.

4) Discuss the social welfare implications of price discrimination

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