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Price Discrimination: Potential Profits - Harvard University › people › tfisher › IP ›...
Transcript of Price Discrimination: Potential Profits - Harvard University › people › tfisher › IP ›...
![Page 1: Price Discrimination: Potential Profits - Harvard University › people › tfisher › IP › Price... · © 2012, William Fisher. This work is licensed under the Creative Commons](https://reader036.fdocuments.in/reader036/viewer/2022070716/5ed9cbd9c775f12f0c206943/html5/thumbnails/1.jpg)
© 2012, William Fisher. This work is licensed under the Creative Commons Attribution-NonCommercial-ShareAlike 2.5 License.
Price Discrimination:Potential Profits
William FisherFebruary 8, 2012
Sunday, February 12, 12
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October 30, 2011
© 2011, William Fisher. This work is licensed under the Creative Commons Attribution-NonCommercial-ShareAlike 2.5 License.
Economic Conditions Confronting Seller
$
Quantity
Sunday, February 12, 12
![Page 3: Price Discrimination: Potential Profits - Harvard University › people › tfisher › IP › Price... · © 2012, William Fisher. This work is licensed under the Creative Commons](https://reader036.fdocuments.in/reader036/viewer/2022070716/5ed9cbd9c775f12f0c206943/html5/thumbnails/3.jpg)
October 30, 2011
© 2011, William Fisher. This work is licensed under the Creative Commons Attribution-NonCommercial-ShareAlike 2.5 License.
$
Quantity
Marginal Cost
Economic Conditions Confronting Seller
Sunday, February 12, 12
![Page 4: Price Discrimination: Potential Profits - Harvard University › people › tfisher › IP › Price... · © 2012, William Fisher. This work is licensed under the Creative Commons](https://reader036.fdocuments.in/reader036/viewer/2022070716/5ed9cbd9c775f12f0c206943/html5/thumbnails/4.jpg)
October 30, 2011
© 2011, William Fisher. This work is licensed under the Creative Commons Attribution-NonCommercial-ShareAlike 2.5 License.
$
Quantity
Marginal Cost
P(X)
X
Economic Conditions Confronting Seller
Sunday, February 12, 12
![Page 5: Price Discrimination: Potential Profits - Harvard University › people › tfisher › IP › Price... · © 2012, William Fisher. This work is licensed under the Creative Commons](https://reader036.fdocuments.in/reader036/viewer/2022070716/5ed9cbd9c775f12f0c206943/html5/thumbnails/5.jpg)
October 30, 2011
© 2011, William Fisher. This work is licensed under the Creative Commons Attribution-NonCommercial-ShareAlike 2.5 License.
$
Quantity
P(Y)
Y
Marginal Cost
P(X)
X
Economic Conditions Confronting Seller
Sunday, February 12, 12
![Page 6: Price Discrimination: Potential Profits - Harvard University › people › tfisher › IP › Price... · © 2012, William Fisher. This work is licensed under the Creative Commons](https://reader036.fdocuments.in/reader036/viewer/2022070716/5ed9cbd9c775f12f0c206943/html5/thumbnails/6.jpg)
October 30, 2011
© 2011, William Fisher. This work is licensed under the Creative Commons Attribution-NonCommercial-ShareAlike 2.5 License.
$
Quantity
P(Y)
Y
Marginal Cost
P(X)
X
P(Z)
Z
Economic Conditions Confronting Seller
Sunday, February 12, 12
![Page 7: Price Discrimination: Potential Profits - Harvard University › people › tfisher › IP › Price... · © 2012, William Fisher. This work is licensed under the Creative Commons](https://reader036.fdocuments.in/reader036/viewer/2022070716/5ed9cbd9c775f12f0c206943/html5/thumbnails/7.jpg)
October 30, 2011
© 2011, William Fisher. This work is licensed under the Creative Commons Attribution-NonCommercial-ShareAlike 2.5 License.
$
Quantity
P(Y)
Y
Marginal Cost
Demand
P(X)
X
P(Z)
Z
Economic Conditions Confronting Seller
Sunday, February 12, 12
![Page 8: Price Discrimination: Potential Profits - Harvard University › people › tfisher › IP › Price... · © 2012, William Fisher. This work is licensed under the Creative Commons](https://reader036.fdocuments.in/reader036/viewer/2022070716/5ed9cbd9c775f12f0c206943/html5/thumbnails/8.jpg)
October 30, 2011
© 2011, William Fisher. This work is licensed under the Creative Commons Attribution-NonCommercial-ShareAlike 2.5 License.
$
Quantity
P(Y)
Y
Marginal Cost
Demand
P(X)
X
P(Z)
Z
Sunday, February 12, 12
![Page 9: Price Discrimination: Potential Profits - Harvard University › people › tfisher › IP › Price... · © 2012, William Fisher. This work is licensed under the Creative Commons](https://reader036.fdocuments.in/reader036/viewer/2022070716/5ed9cbd9c775f12f0c206943/html5/thumbnails/9.jpg)
October 30, 2011
© 2011, William Fisher. This work is licensed under the Creative Commons Attribution-NonCommercial-ShareAlike 2.5 License.
$
Quantity
P(Y)
Y
Marginal Cost
Demand
P(X)
X
P(Z)
Z
Perfect Price Discrimination
Sunday, February 12, 12
![Page 10: Price Discrimination: Potential Profits - Harvard University › people › tfisher › IP › Price... · © 2012, William Fisher. This work is licensed under the Creative Commons](https://reader036.fdocuments.in/reader036/viewer/2022070716/5ed9cbd9c775f12f0c206943/html5/thumbnails/10.jpg)
October 30, 2011
© 2011, William Fisher. This work is licensed under the Creative Commons Attribution-NonCommercial-ShareAlike 2.5 License.
$
Quantity
P(Y)
Y
Marginal Cost
Demand
P(X)
X
P(Z)
ZProfit-maximizing output
“Monopoly Profits”
Perfect Price Discrimination
Sunday, February 12, 12
![Page 11: Price Discrimination: Potential Profits - Harvard University › people › tfisher › IP › Price... · © 2012, William Fisher. This work is licensed under the Creative Commons](https://reader036.fdocuments.in/reader036/viewer/2022070716/5ed9cbd9c775f12f0c206943/html5/thumbnails/11.jpg)
October 30, 2011
© 2011, William Fisher. This work is licensed under the Creative Commons Attribution-NonCommercial-ShareAlike 2.5 License.
Sunday, February 12, 12
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October 30, 2011
© 2011, William Fisher. This work is licensed under the Creative Commons Attribution-NonCommercial-ShareAlike 2.5 License.
No Price Discrimination
$
Quantity
Demand
CG
H
Marginal Cost
O
A
I
Sunday, February 12, 12
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October 30, 2011
© 2011, William Fisher. This work is licensed under the Creative Commons Attribution-NonCommercial-ShareAlike 2.5 License.
$
Quantity
Demand
CG
H
Marginal Cost
Marginal Revenue
O
A
I
No Price Discrimination
Sunday, February 12, 12
![Page 14: Price Discrimination: Potential Profits - Harvard University › people › tfisher › IP › Price... · © 2012, William Fisher. This work is licensed under the Creative Commons](https://reader036.fdocuments.in/reader036/viewer/2022070716/5ed9cbd9c775f12f0c206943/html5/thumbnails/14.jpg)
October 30, 2011
© 2011, William Fisher. This work is licensed under the Creative Commons Attribution-NonCommercial-ShareAlike 2.5 License.
$
Quantity
Demand
B
C
D
E
F
G
H
Marginal Cost
Marginal Revenue
O
A
I
No Price Discrimination
Sunday, February 12, 12
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October 30, 2011
© 2011, William Fisher. This work is licensed under the Creative Commons Attribution-NonCommercial-ShareAlike 2.5 License.
$
Quantity
Demand
B
C
D
E
F
G
H
Marginal Cost
Profit-maximizing output
Prof
it-m
axim
izin
g pr
ice
Marginal Revenue
O
A
I
No Price Discrimination
Sunday, February 12, 12
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October 30, 2011
© 2011, William Fisher. This work is licensed under the Creative Commons Attribution-NonCommercial-ShareAlike 2.5 License.
$
Quantity
Demand
B
C
D
E
F
G
H
Marginal Cost
Profit-maximizing output
Prof
it-m
axim
izin
g pr
ice
Monopoly Profits
Marginal Revenue
O
A
I
1
No Price Discrimination
Sunday, February 12, 12
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October 30, 2011
© 2011, William Fisher. This work is licensed under the Creative Commons Attribution-NonCommercial-ShareAlike 2.5 License.
$
Quantity
Demand
B
C
D
E
F
G
H
Marginal Cost
Profit-maximizing output
Prof
it-m
axim
izin
g pr
ice
Monopoly Profits
O
A
I
1
2
Consumer Surplus
No Price Discrimination
Sunday, February 12, 12
![Page 18: Price Discrimination: Potential Profits - Harvard University › people › tfisher › IP › Price... · © 2012, William Fisher. This work is licensed under the Creative Commons](https://reader036.fdocuments.in/reader036/viewer/2022070716/5ed9cbd9c775f12f0c206943/html5/thumbnails/18.jpg)
October 30, 2011
© 2011, William Fisher. This work is licensed under the Creative Commons Attribution-NonCommercial-ShareAlike 2.5 License.
$
Quantity
Demand
B
C
D
E
F
G
H
Marginal Cost
Profit-maximizing output
Prof
it-m
axim
izin
g pr
ice
Monopoly Profits
O
A
I
1
2
3
Consumer Surplus
Deadweight Loss (foregoneconsumer surplus)
E
No Price Discrimination
Sunday, February 12, 12
![Page 19: Price Discrimination: Potential Profits - Harvard University › people › tfisher › IP › Price... · © 2012, William Fisher. This work is licensed under the Creative Commons](https://reader036.fdocuments.in/reader036/viewer/2022070716/5ed9cbd9c775f12f0c206943/html5/thumbnails/19.jpg)
October 30, 2011
© 2011, William Fisher. This work is licensed under the Creative Commons Attribution-NonCommercial-ShareAlike 2.5 License.
$
Quantity
Marginal Cost
Demand
“Monopoly Profits”
Perfect Price Discrimination
Sunday, February 12, 12
![Page 20: Price Discrimination: Potential Profits - Harvard University › people › tfisher › IP › Price... · © 2012, William Fisher. This work is licensed under the Creative Commons](https://reader036.fdocuments.in/reader036/viewer/2022070716/5ed9cbd9c775f12f0c206943/html5/thumbnails/20.jpg)
October 30, 2011
© 2011, William Fisher. This work is licensed under the Creative Commons Attribution-NonCommercial-ShareAlike 2.5 License.
Suppose the seller had imperfect information about each buyer...
$
Quantity
Marginal Cost
Demand
“Monopoly Profits”
Sunday, February 12, 12
![Page 21: Price Discrimination: Potential Profits - Harvard University › people › tfisher › IP › Price... · © 2012, William Fisher. This work is licensed under the Creative Commons](https://reader036.fdocuments.in/reader036/viewer/2022070716/5ed9cbd9c775f12f0c206943/html5/thumbnails/21.jpg)
October 30, 2011
© 2011, William Fisher. This work is licensed under the Creative Commons Attribution-NonCommercial-ShareAlike 2.5 License.
Suppose the seller had imperfect information about each buyer...
$
Quantity
Marginal Cost
Demand
Sunday, February 12, 12
![Page 22: Price Discrimination: Potential Profits - Harvard University › people › tfisher › IP › Price... · © 2012, William Fisher. This work is licensed under the Creative Commons](https://reader036.fdocuments.in/reader036/viewer/2022070716/5ed9cbd9c775f12f0c206943/html5/thumbnails/22.jpg)
October 30, 2011
© 2011, William Fisher. This work is licensed under the Creative Commons Attribution-NonCommercial-ShareAlike 2.5 License.
Suppose the seller had imperfect information about each buyer...
$
Quantity
Marginal Cost
Demand
Seller estimates that each buyer will be able and willing to spend at least this much
Sunday, February 12, 12
![Page 23: Price Discrimination: Potential Profits - Harvard University › people › tfisher › IP › Price... · © 2012, William Fisher. This work is licensed under the Creative Commons](https://reader036.fdocuments.in/reader036/viewer/2022070716/5ed9cbd9c775f12f0c206943/html5/thumbnails/23.jpg)
October 30, 2011
© 2011, William Fisher. This work is licensed under the Creative Commons Attribution-NonCommercial-ShareAlike 2.5 License.
Suppose the seller had imperfect information about each buyer...
$
Quantity
Marginal Cost
Demand
Seller estimates that each buyer will be able and willing to spend at least this much -- and charges them that much
Sunday, February 12, 12
![Page 24: Price Discrimination: Potential Profits - Harvard University › people › tfisher › IP › Price... · © 2012, William Fisher. This work is licensed under the Creative Commons](https://reader036.fdocuments.in/reader036/viewer/2022070716/5ed9cbd9c775f12f0c206943/html5/thumbnails/24.jpg)
October 30, 2011
© 2011, William Fisher. This work is licensed under the Creative Commons Attribution-NonCommercial-ShareAlike 2.5 License.
Suppose the seller had imperfect information about each buyer...
$
Quantity
Marginal Cost
DemandRevenue
Sunday, February 12, 12
![Page 25: Price Discrimination: Potential Profits - Harvard University › people › tfisher › IP › Price... · © 2012, William Fisher. This work is licensed under the Creative Commons](https://reader036.fdocuments.in/reader036/viewer/2022070716/5ed9cbd9c775f12f0c206943/html5/thumbnails/25.jpg)
October 30, 2011
© 2011, William Fisher. This work is licensed under the Creative Commons Attribution-NonCommercial-ShareAlike 2.5 License.
Suppose the seller had imperfect information about each buyer...
$
Quantity
Marginal Cost
DemandRevenue
Cost Cost
Sunday, February 12, 12
![Page 26: Price Discrimination: Potential Profits - Harvard University › people › tfisher › IP › Price... · © 2012, William Fisher. This work is licensed under the Creative Commons](https://reader036.fdocuments.in/reader036/viewer/2022070716/5ed9cbd9c775f12f0c206943/html5/thumbnails/26.jpg)
October 30, 2011
© 2011, William Fisher. This work is licensed under the Creative Commons Attribution-NonCommercial-ShareAlike 2.5 License.
Suppose the seller had imperfect information about each buyer...
$
Quantity
Marginal Cost
DemandProfit
Cost Cost
Sunday, February 12, 12
![Page 27: Price Discrimination: Potential Profits - Harvard University › people › tfisher › IP › Price... · © 2012, William Fisher. This work is licensed under the Creative Commons](https://reader036.fdocuments.in/reader036/viewer/2022070716/5ed9cbd9c775f12f0c206943/html5/thumbnails/27.jpg)
October 30, 2011
© 2011, William Fisher. This work is licensed under the Creative Commons Attribution-NonCommercial-ShareAlike 2.5 License.
Suppose the seller had imperfect information about each buyer...
$
Quantity
Marginal Cost
DemandProfit
Cost CostCost Cost
Consumer Surplus
Deadweight Loss
Sunday, February 12, 12
![Page 28: Price Discrimination: Potential Profits - Harvard University › people › tfisher › IP › Price... · © 2012, William Fisher. This work is licensed under the Creative Commons](https://reader036.fdocuments.in/reader036/viewer/2022070716/5ed9cbd9c775f12f0c206943/html5/thumbnails/28.jpg)
October 30, 2011
© 2011, William Fisher. This work is licensed under the Creative Commons Attribution-NonCommercial-ShareAlike 2.5 License.
Suppose the seller had imperfect information about each buyer...
$
Quantity
Marginal Cost
DemandProfit
Cost Cost
Consumer Surplus
Deadweight Loss
Sunday, February 12, 12
![Page 29: Price Discrimination: Potential Profits - Harvard University › people › tfisher › IP › Price... · © 2012, William Fisher. This work is licensed under the Creative Commons](https://reader036.fdocuments.in/reader036/viewer/2022070716/5ed9cbd9c775f12f0c206943/html5/thumbnails/29.jpg)
October 30, 2011
© 2011, William Fisher. This work is licensed under the Creative Commons Attribution-NonCommercial-ShareAlike 2.5 License.
$
Marginal Cost
Demand
Cost Cost
Consumer Surplus
Deadweight Loss
First Degree
Sunday, February 12, 12
![Page 30: Price Discrimination: Potential Profits - Harvard University › people › tfisher › IP › Price... · © 2012, William Fisher. This work is licensed under the Creative Commons](https://reader036.fdocuments.in/reader036/viewer/2022070716/5ed9cbd9c775f12f0c206943/html5/thumbnails/30.jpg)
October 30, 2011
© 2011, William Fisher. This work is licensed under the Creative Commons Attribution-NonCommercial-ShareAlike 2.5 License.
Sunday, February 12, 12
![Page 31: Price Discrimination: Potential Profits - Harvard University › people › tfisher › IP › Price... · © 2012, William Fisher. This work is licensed under the Creative Commons](https://reader036.fdocuments.in/reader036/viewer/2022070716/5ed9cbd9c775f12f0c206943/html5/thumbnails/31.jpg)
October 30, 2011
© 2011, William Fisher. This work is licensed under the Creative Commons Attribution-NonCommercial-ShareAlike 2.5 License.
Second and Third-DegreePrice Discrimination
Sunday, February 12, 12
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October 30, 2011
© 2011, William Fisher. This work is licensed under the Creative Commons Attribution-NonCommercial-ShareAlike 2.5 License.
Second and Third-DegreePrice Discrimination
Seller separates buyers into two groups
Sunday, February 12, 12
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October 30, 2011
© 2011, William Fisher. This work is licensed under the Creative Commons Attribution-NonCommercial-ShareAlike 2.5 License.
Second and Third-DegreePrice Discrimination
Sunday, February 12, 12
![Page 34: Price Discrimination: Potential Profits - Harvard University › people › tfisher › IP › Price... · © 2012, William Fisher. This work is licensed under the Creative Commons](https://reader036.fdocuments.in/reader036/viewer/2022070716/5ed9cbd9c775f12f0c206943/html5/thumbnails/34.jpg)
© 2012, William Fisher. This work is licensed under the Creative Commons Attribution-NonCommercial-ShareAlike 2.5 License.
Market A
O 1 2 3
$
1
2
3
4
5
Q(x100,000)
Second and Third-DegreePrice Discrimination
Sunday, February 12, 12
![Page 35: Price Discrimination: Potential Profits - Harvard University › people › tfisher › IP › Price... · © 2012, William Fisher. This work is licensed under the Creative Commons](https://reader036.fdocuments.in/reader036/viewer/2022070716/5ed9cbd9c775f12f0c206943/html5/thumbnails/35.jpg)
© 2012, William Fisher. This work is licensed under the Creative Commons Attribution-NonCommercial-ShareAlike 2.5 License.
Market A
O 1 2 3
$
1
2
3
4
5
Q(x100,000)
Second and Third-DegreePrice Discrimination
Sunday, February 12, 12
![Page 36: Price Discrimination: Potential Profits - Harvard University › people › tfisher › IP › Price... · © 2012, William Fisher. This work is licensed under the Creative Commons](https://reader036.fdocuments.in/reader036/viewer/2022070716/5ed9cbd9c775f12f0c206943/html5/thumbnails/36.jpg)
© 2012, William Fisher. This work is licensed under the Creative Commons Attribution-NonCommercial-ShareAlike 2.5 License.
Market A
MC
O 1 2 3
$
1
2
3
4
5
Q(x100,000)
Second and Third-DegreePrice Discrimination
Sunday, February 12, 12
![Page 37: Price Discrimination: Potential Profits - Harvard University › people › tfisher › IP › Price... · © 2012, William Fisher. This work is licensed under the Creative Commons](https://reader036.fdocuments.in/reader036/viewer/2022070716/5ed9cbd9c775f12f0c206943/html5/thumbnails/37.jpg)
© 2012, William Fisher. This work is licensed under the Creative Commons Attribution-NonCommercial-ShareAlike 2.5 License.
Market A
MC
O 1 2 3
$
1
2
3
4
5
MR Q(x100,000)
Second and Third-DegreePrice Discrimination
Sunday, February 12, 12
![Page 38: Price Discrimination: Potential Profits - Harvard University › people › tfisher › IP › Price... · © 2012, William Fisher. This work is licensed under the Creative Commons](https://reader036.fdocuments.in/reader036/viewer/2022070716/5ed9cbd9c775f12f0c206943/html5/thumbnails/38.jpg)
© 2012, William Fisher. This work is licensed under the Creative Commons Attribution-NonCommercial-ShareAlike 2.5 License.
Market A
MC
O 1 2 3
$
1
2
3
4
5
MR Q(x100,000)
Second and Third-DegreePrice Discrimination
Sunday, February 12, 12
![Page 39: Price Discrimination: Potential Profits - Harvard University › people › tfisher › IP › Price... · © 2012, William Fisher. This work is licensed under the Creative Commons](https://reader036.fdocuments.in/reader036/viewer/2022070716/5ed9cbd9c775f12f0c206943/html5/thumbnails/39.jpg)
© 2012, William Fisher. This work is licensed under the Creative Commons Attribution-NonCommercial-ShareAlike 2.5 License.
Market A
MC
O 1 2 3
$
1
2
3
4
5
MR Q(x100,000)
Second and Third-DegreePrice Discrimination
Sunday, February 12, 12
![Page 40: Price Discrimination: Potential Profits - Harvard University › people › tfisher › IP › Price... · © 2012, William Fisher. This work is licensed under the Creative Commons](https://reader036.fdocuments.in/reader036/viewer/2022070716/5ed9cbd9c775f12f0c206943/html5/thumbnails/40.jpg)
© 2012, William Fisher. This work is licensed under the Creative Commons Attribution-NonCommercial-ShareAlike 2.5 License.
Market A
MC
O 1 2 3
$
1
2
3
4
5
MR Q(x100,000)
Second and Third-DegreePrice Discrimination
Sunday, February 12, 12
![Page 41: Price Discrimination: Potential Profits - Harvard University › people › tfisher › IP › Price... · © 2012, William Fisher. This work is licensed under the Creative Commons](https://reader036.fdocuments.in/reader036/viewer/2022070716/5ed9cbd9c775f12f0c206943/html5/thumbnails/41.jpg)
© 2012, William Fisher. This work is licensed under the Creative Commons Attribution-NonCommercial-ShareAlike 2.5 License.
Market A
MC
O 1 2 3
$
1
2
3
4
5
MR Q(x100,000)
Second and Third-DegreePrice Discrimination
Sunday, February 12, 12
![Page 42: Price Discrimination: Potential Profits - Harvard University › people › tfisher › IP › Price... · © 2012, William Fisher. This work is licensed under the Creative Commons](https://reader036.fdocuments.in/reader036/viewer/2022070716/5ed9cbd9c775f12f0c206943/html5/thumbnails/42.jpg)
© 2012, William Fisher. This work is licensed under the Creative Commons Attribution-NonCommercial-ShareAlike 2.5 License.
Market A
MC
O 1 2 3
$
1
2
3
4
5
MR Q(x100,000)
Second and Third-DegreePrice Discrimination
Sunday, February 12, 12
![Page 43: Price Discrimination: Potential Profits - Harvard University › people › tfisher › IP › Price... · © 2012, William Fisher. This work is licensed under the Creative Commons](https://reader036.fdocuments.in/reader036/viewer/2022070716/5ed9cbd9c775f12f0c206943/html5/thumbnails/43.jpg)
© 2012, William Fisher. This work is licensed under the Creative Commons Attribution-NonCommercial-ShareAlike 2.5 License.
Market A
MC
O 1 2 3
$
1
2
3
4
5
MR
Profit: $200,000
Deadweight loss: $100,000
Consumer Surplus: $100,000
Q(x100,000)
Second and Third-DegreePrice Discrimination
Sunday, February 12, 12
![Page 44: Price Discrimination: Potential Profits - Harvard University › people › tfisher › IP › Price... · © 2012, William Fisher. This work is licensed under the Creative Commons](https://reader036.fdocuments.in/reader036/viewer/2022070716/5ed9cbd9c775f12f0c206943/html5/thumbnails/44.jpg)
© 2012, William Fisher. This work is licensed under the Creative Commons Attribution-NonCommercial-ShareAlike 2.5 License.
Market A
MC
O 1 2 3
$
1
2
3
4
5
MR
Profit: $200,000
Deadweight loss: $100,000
Consumer Surplus: $100,000
Q(x100,000)
1235 4Q(x100,000)
Second and Third-DegreePrice Discrimination
Sunday, February 12, 12
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© 2012, William Fisher. This work is licensed under the Creative Commons Attribution-NonCommercial-ShareAlike 2.5 License.
Market A
MC
O 1 2 3
$
1
2
3
4
5
MR
Profit: $200,000
Deadweight loss: $100,000
Consumer Surplus: $100,000
Q(x100,000)
Market B
1235 4Q(x100,000)
Second and Third-DegreePrice Discrimination
Sunday, February 12, 12
![Page 46: Price Discrimination: Potential Profits - Harvard University › people › tfisher › IP › Price... · © 2012, William Fisher. This work is licensed under the Creative Commons](https://reader036.fdocuments.in/reader036/viewer/2022070716/5ed9cbd9c775f12f0c206943/html5/thumbnails/46.jpg)
© 2012, William Fisher. This work is licensed under the Creative Commons Attribution-NonCommercial-ShareAlike 2.5 License.
Market A
MC
O 1 2 3
$
1
2
3
4
5
MR
Profit: $200,000
Deadweight loss: $100,000
Consumer Surplus: $100,000
Q(x100,000)
Market B
MC
1235 4Q(x100,000)
Second and Third-DegreePrice Discrimination
Sunday, February 12, 12
![Page 47: Price Discrimination: Potential Profits - Harvard University › people › tfisher › IP › Price... · © 2012, William Fisher. This work is licensed under the Creative Commons](https://reader036.fdocuments.in/reader036/viewer/2022070716/5ed9cbd9c775f12f0c206943/html5/thumbnails/47.jpg)
© 2012, William Fisher. This work is licensed under the Creative Commons Attribution-NonCommercial-ShareAlike 2.5 License.
Market A
MC
O 1 2 3
$
1
2
3
4
5
MR
Profit: $200,000
Deadweight loss: $100,000
Consumer Surplus: $100,000
Q(x100,000)
Market B
MC
1235 4Q(x100,000)
Second and Third-DegreePrice Discrimination
Sunday, February 12, 12
![Page 48: Price Discrimination: Potential Profits - Harvard University › people › tfisher › IP › Price... · © 2012, William Fisher. This work is licensed under the Creative Commons](https://reader036.fdocuments.in/reader036/viewer/2022070716/5ed9cbd9c775f12f0c206943/html5/thumbnails/48.jpg)
© 2012, William Fisher. This work is licensed under the Creative Commons Attribution-NonCommercial-ShareAlike 2.5 License.
Market A
MC
O 1 2 3
$
1
2
3
4
5
MR
Profit: $200,000
Deadweight loss: $100,000
Consumer Surplus: $100,000
Q(x100,000)
Market B
MC
MR1235 4
Q(x100,000)
Second and Third-DegreePrice Discrimination
Sunday, February 12, 12
![Page 49: Price Discrimination: Potential Profits - Harvard University › people › tfisher › IP › Price... · © 2012, William Fisher. This work is licensed under the Creative Commons](https://reader036.fdocuments.in/reader036/viewer/2022070716/5ed9cbd9c775f12f0c206943/html5/thumbnails/49.jpg)
© 2012, William Fisher. This work is licensed under the Creative Commons Attribution-NonCommercial-ShareAlike 2.5 License.
Market A
MC
O 1 2 3
$
1
2
3
4
5
MR
Profit: $200,000
Deadweight loss: $100,000
Consumer Surplus: $100,000
Q(x100,000)
Market B
MC
MR1235 4
Q(x100,000)
Second and Third-DegreePrice Discrimination
Sunday, February 12, 12
![Page 50: Price Discrimination: Potential Profits - Harvard University › people › tfisher › IP › Price... · © 2012, William Fisher. This work is licensed under the Creative Commons](https://reader036.fdocuments.in/reader036/viewer/2022070716/5ed9cbd9c775f12f0c206943/html5/thumbnails/50.jpg)
© 2012, William Fisher. This work is licensed under the Creative Commons Attribution-NonCommercial-ShareAlike 2.5 License.
Market A
MC
O 1 2 3
$
1
2
3
4
5
MR
Profit: $200,000
Deadweight loss: $100,000
Consumer Surplus: $100,000
Q(x100,000)
Market B
MC
MR1235 4
Q(x100,000)
Second and Third-DegreePrice Discrimination
Sunday, February 12, 12
![Page 51: Price Discrimination: Potential Profits - Harvard University › people › tfisher › IP › Price... · © 2012, William Fisher. This work is licensed under the Creative Commons](https://reader036.fdocuments.in/reader036/viewer/2022070716/5ed9cbd9c775f12f0c206943/html5/thumbnails/51.jpg)
© 2012, William Fisher. This work is licensed under the Creative Commons Attribution-NonCommercial-ShareAlike 2.5 License.
Market A
MC
O 1 2 3
$
1
2
3
4
5
MR
Profit: $200,000
Deadweight loss: $100,000
Consumer Surplus: $100,000
Q(x100,000)
Market B
MC
MR1235 4
Q(x100,000)
Second and Third-DegreePrice Discrimination
Sunday, February 12, 12
![Page 52: Price Discrimination: Potential Profits - Harvard University › people › tfisher › IP › Price... · © 2012, William Fisher. This work is licensed under the Creative Commons](https://reader036.fdocuments.in/reader036/viewer/2022070716/5ed9cbd9c775f12f0c206943/html5/thumbnails/52.jpg)
© 2012, William Fisher. This work is licensed under the Creative Commons Attribution-NonCommercial-ShareAlike 2.5 License.
Market A
MC
O 1 2 3
$
1
2
3
4
5
MR
Profit: $200,000
Deadweight loss: $100,000
Consumer Surplus: $100,000
Q(x100,000)
Market B
MC
MR1235 4
Q(x100,000)
Second and Third-DegreePrice Discrimination
Sunday, February 12, 12
![Page 53: Price Discrimination: Potential Profits - Harvard University › people › tfisher › IP › Price... · © 2012, William Fisher. This work is licensed under the Creative Commons](https://reader036.fdocuments.in/reader036/viewer/2022070716/5ed9cbd9c775f12f0c206943/html5/thumbnails/53.jpg)
© 2012, William Fisher. This work is licensed under the Creative Commons Attribution-NonCommercial-ShareAlike 2.5 License.
Market A
MC
O 1 2 3
$
1
2
3
4
5
MR
Profit: $200,000
Deadweight loss: $100,000
Consumer Surplus: $100,000
Q(x100,000)
Market B
MC
MR1235 4
Q(x100,000)
Second and Third-DegreePrice Discrimination
Sunday, February 12, 12
![Page 54: Price Discrimination: Potential Profits - Harvard University › people › tfisher › IP › Price... · © 2012, William Fisher. This work is licensed under the Creative Commons](https://reader036.fdocuments.in/reader036/viewer/2022070716/5ed9cbd9c775f12f0c206943/html5/thumbnails/54.jpg)
© 2012, William Fisher. This work is licensed under the Creative Commons Attribution-NonCommercial-ShareAlike 2.5 License.
Market A
MC
O 1 2 3
$
1
2
3
4
5
MR
Profit: $200,000
Deadweight loss: $100,000
Consumer Surplus: $100,000
Q(x100,000)
Market B
MC
MR
Consumer Surplus: $56,250
Profit: $112,500
Deadweight loss: $56,250
1235 4Q(x100,000)
Second and Third-DegreePrice Discrimination
Sunday, February 12, 12
![Page 55: Price Discrimination: Potential Profits - Harvard University › people › tfisher › IP › Price... · © 2012, William Fisher. This work is licensed under the Creative Commons](https://reader036.fdocuments.in/reader036/viewer/2022070716/5ed9cbd9c775f12f0c206943/html5/thumbnails/55.jpg)
© 2012, William Fisher. This work is licensed under the Creative Commons Attribution-NonCommercial-ShareAlike 2.5 License.
Market A
MC
O 1 2 3
$
1
2
3
4
5
MR
Profit: $200,000
Deadweight loss: $100,000
Consumer Surplus: $100,000
Q(x100,000)
Market B
MC
1235 4MR
Consumer Surplus: $56,250
Profit: $112,500
Deadweight loss: $56,250
Q(x100,000)
Price Discrimination
Sunday, February 12, 12
![Page 56: Price Discrimination: Potential Profits - Harvard University › people › tfisher › IP › Price... · © 2012, William Fisher. This work is licensed under the Creative Commons](https://reader036.fdocuments.in/reader036/viewer/2022070716/5ed9cbd9c775f12f0c206943/html5/thumbnails/56.jpg)
© 2012, William Fisher. This work is licensed under the Creative Commons Attribution-NonCommercial-ShareAlike 2.5 License.
Market A
MC
O 1 2 3
$
1
2
3
4
5
MR Q(x100,000)
Market B
MC
1235 4MR
Consumer Surplus: $156,250
Profit: $312,500
Deadweight loss: $156,250
Q(x100,000)
Price Discrimination
Sunday, February 12, 12
![Page 57: Price Discrimination: Potential Profits - Harvard University › people › tfisher › IP › Price... · © 2012, William Fisher. This work is licensed under the Creative Commons](https://reader036.fdocuments.in/reader036/viewer/2022070716/5ed9cbd9c775f12f0c206943/html5/thumbnails/57.jpg)
© 2012, William Fisher. This work is licensed under the Creative Commons Attribution-NonCommercial-ShareAlike 2.5 License.
Market A
MC
O 1 2 3
$
1
2
3
4
5
MR Q(x100,000)
Market B
MC
1235 4MR
Consumer Surplus: 250,000
Profit: $250,000
Deadweight loss: $125,000
Q(x100,000)
No Price Discrimination
Sunday, February 12, 12
![Page 58: Price Discrimination: Potential Profits - Harvard University › people › tfisher › IP › Price... · © 2012, William Fisher. This work is licensed under the Creative Commons](https://reader036.fdocuments.in/reader036/viewer/2022070716/5ed9cbd9c775f12f0c206943/html5/thumbnails/58.jpg)
© 2012, William Fisher. This work is licensed under the Creative Commons Attribution-NonCommercial-ShareAlike 2.5 License.
Market A
MC
O 1 2 3
$
1
2
3
4
5
MR Q(x100,000)
Market B
MC
1235 4MR
Consumer Surplus: 250,000
Profit: $250,000
Deadweight loss: $125,000
Q(x100,000)
No Price Discrimination
Sunday, February 12, 12
![Page 59: Price Discrimination: Potential Profits - Harvard University › people › tfisher › IP › Price... · © 2012, William Fisher. This work is licensed under the Creative Commons](https://reader036.fdocuments.in/reader036/viewer/2022070716/5ed9cbd9c775f12f0c206943/html5/thumbnails/59.jpg)
© 2012, William Fisher. This work is licensed under the Creative Commons Attribution-NonCommercial-ShareAlike 2.5 License.
Sunday, February 12, 12
![Page 60: Price Discrimination: Potential Profits - Harvard University › people › tfisher › IP › Price... · © 2012, William Fisher. This work is licensed under the Creative Commons](https://reader036.fdocuments.in/reader036/viewer/2022070716/5ed9cbd9c775f12f0c206943/html5/thumbnails/60.jpg)
October 30, 2011
© 2011, William Fisher. This work is licensed under the Creative Commons Attribution-NonCommercial-ShareAlike 2.5 License.
Sunday, February 12, 12