Presentation is loading. Please wait.

Presentation is loading. Please wait.

ECON 308 Product Pricing with Monopoly Power Chapter 7 October 1 st – 6 th, 2009.

Published byPaul Gilmore Modified over 9 years ago

Similar presentations

Presentation on theme: "ECON 308 Product Pricing with Monopoly Power Chapter 7 October 1 st – 6 th, 2009."— Presentation transcript:

1 ECON 308 Product Pricing with Monopoly Power Chapter 7 October 1 st – 6 th, 2009

2 Price Discrimination Charging different prices for different units sold. Allows firms to increase sales and capture more of consumer surplus.

3 Monopoly Pricing: Single Price $ Price Qty/T Demand Marginal Cost MR Pm Qm Potential Efficiency loss

4 First Degree: Charging different customers different prices. First Degree: Charging different customers different prices. Auction College scholarships

5 First Degree First Degree: Different Prices for different buyers $ Price Qty/T Demand Marginal Cost MR Tuition Qm Scholarship Amount

6 First Degree: Charging different customers different prices. First Degree: Charging different customers different prices. Auction College scholarships IBM Punch Cards Polariod Camera, Film Ink Jet Printers, Cartridges Swiffer, pads Glllette Razor, Blades

7 Second Degree: Second Degree: (Quantity Forcing) Offering a schedule of prices to all buyers, which successively lowers the price for additional units, purchased (Moving down each buyers individual demand) Tires: Buy 3, get 4th free. Soft Drinks:Product prices, – medium16 oz. $ 1.09,.07/oz. – large: 22 oz. $ 1.19, extra 6 oz. @.02/oz. – extra large:32 oz. $1.29, extra 10 oz. @.01/ oz. Two Part Tariff: Entry Fee plus per unit –Costco: Membership & Price

8 Third Degree: Third Degree: Charging different prices to different groups according to different elasticity of Demand. Grocery coupons Prescription drugs in different countries. Doctors medical services Newly released unique products Movies: Children, Seniors, Middle; Matinee Mail Order Catalogues: Old vs. New Customer Freeway Adjacent Restaurant Brand name mixers on Holiday Sale Mattresses: Match any advertised price Menu

9 Necessary Conditions for Successful Price Discrimination Ability to identify and separate buyers by elasticity of demand. Collect different prices from the different buyers Prevent Resale

Download ppt "ECON 308 Product Pricing with Monopoly Power Chapter 7 October 1 st – 6 th, 2009."

Similar presentations

How Customer Differences Can Lead to Price Differences

How Customer Differences Can Lead to Price Differences
Pricing To Capture Surplus Value. Capturing Surplus: By applying the price discrimination. Price discrimination: the practice of charging consumers different.

Pricing To Capture Surplus Value. Capturing Surplus: By applying the price discrimination. Price discrimination: the practice of charging consumers different.
Price Discrimination: Capturing CS

Price Discrimination: Capturing CS
Price discrimination Definition: charging different prices for the same product to different consumers Examples –senior citizen discounts –airfares: business.

Price discrimination Definition: charging different prices for the same product to different consumers Examples –senior citizen discounts –airfares: business.
Chapter Twenty-Five Monopoly Behavior. How Should a Monopoly Price? u So far a monopoly has been thought of as a firm which has to sell its product at.

Chapter Twenty-Five Monopoly Behavior. How Should a Monopoly Price? u So far a monopoly has been thought of as a firm which has to sell its product at.
Chapter 12 Capturing Surplus.

Chapter 12 Capturing Surplus.
PRICE DISCRIMINATION. Price discrimination is the practice of selling the same good at different prices to different customers, even though the costs.

PRICE DISCRIMINATION. Price discrimination is the practice of selling the same good at different prices to different customers, even though the costs.
Economics 103 Lecture # 15 Price Searching Continued.

Economics 103 Lecture # 15 Price Searching Continued.
Monopoly Price Discrimination Chapter 15-4. Laugher Curve The First Law of Economics: For every economist, there exists an equal and opposite economist.

Monopoly Price Discrimination Chapter Laugher Curve The First Law of Economics: For every economist, there exists an equal and opposite economist.
Chapter Twenty-Five Monopoly Behavior. How Should a Monopoly Price? u So far a monopoly has been thought of as a firm which has to sell its product at.

Chapter Twenty-Five Monopoly Behavior. How Should a Monopoly Price? u So far a monopoly has been thought of as a firm which has to sell its product at.
Monopoly Part 2. Pricing with Market Power Price Discrimination First Degree Price Discrimination Second Degree Price Discrimination Third Degree Price.

Monopoly Part 2. Pricing with Market Power Price Discrimination First Degree Price Discrimination Second Degree Price Discrimination Third Degree Price.
Managerial Economics and Organizational Architecture, 5e Chapter 7: Pricing with Market Power Copyright © 2009 by The McGraw-Hill Companies, Inc. All.

Managerial Economics and Organizational Architecture, 5e Chapter 7: Pricing with Market Power Copyright © 2009 by The McGraw-Hill Companies, Inc. All.
1 Ch 12: Capturing Surplus Any firm with market power (such as a monopolist) has an incentive to capture (obtain) consumer surplus in order to increase.

1 Ch 12: Capturing Surplus Any firm with market power (such as a monopolist) has an incentive to capture (obtain) consumer surplus in order to increase.
RENT SEEKING Using resources to get monopoly power. Firms are willing to spend up to the amount of monopoly profit which could be made, to make a monopoly.

RENT SEEKING Using resources to get monopoly power. Firms are willing to spend up to the amount of monopoly profit which could be made, to make a monopoly.
Economics of Management Strategy BEE3027 Lecture 4.

Economics of Management Strategy BEE3027 Lecture 4.
4.4 Price Chapter 27.

4.4 Price Chapter 27.
Price Discrimination Monopoly Wrap-Up Chapter 15 Completion.

Price Discrimination Monopoly Wrap-Up Chapter 15 Completion.
Chapter 14 Advanced Pricing Techniques

Chapter 14 Advanced Pricing Techniques
Chapter Twenty-Five Monopoly Behavior. How Should a Monopoly Price? u So far a monopoly has been thought of as a firm which has to sell its product at.

Chapter Twenty-Five Monopoly Behavior. How Should a Monopoly Price? u So far a monopoly has been thought of as a firm which has to sell its product at.
Chapter Twelve Pricing.

Chapter Twelve Pricing.

Similar presentations

Ads by Google