1. Price Discrimination – Writing Log
Read the Economics in Action section on page 357 titled “Sales, Factories, and Ghost Cities”, as well as pages 16 and 17 in Naked Economics. After reading these to excerpts answer the following questions in your writing log:
Define price discrimination and provide three examples. Discuss the role elasticity of demand plays in price discrimination.
Why would a monopolist practice price discrimination? Discuss in terms of profits and total surplus breakdown. Refer to #4 from last night’s homework.
PHS Athletics is the “only game in town”. Develop a price discrimination scheme that Mr. Hice could use to increase profits for the PHS athletic department. The most creative answer gets a sit down meeting with Mr. Hice to discuss your plan.