Requiring airline travelers to spend at least one saturday night away from home to qualify for a low

Demand can vary with the time of day; thus, the firm can charge a lower price when demand is more elastic and marginal cost is lower. If all its customers have the same demand curve, the firm should set Price leadership sometimes occurs in oligopolistic markets because 2. You already know the answer to this: Students have lower incomes on average than others, and lower incomes translate into a lower willingness to pay for normal goods. American Airlines quoted the fares. For example, the firms may not change their prices when marginal costs change. Fewer brands to distinguish remaining brands 2. Each firm earns zero economic profit 1. It has an advertising elasticity of demand of 0. Each firm would have an incentive to increase output to increase profits at the expense of the other firm. Explain the meaning of a Nash equilibrium when firms are competing with respect to price 1 When firms are competing with respect to price, a Nash equilibrium indicates Would it produce only a single brand? What are price, output, profits, marginal revenues, and deadweight loss if the monopolist can price discriminate? Since price discrimination requires charging one group a higher price than another, there is potentially an opportunity for arbitrage.

What information does it need? However, seniors have more free time and therefore are able to substitute to matinee showingsMatinee showings are those early in the day, which are usually discounted.

In contrast, airline price discrimination is not based on the identity of the buyer but rather on the choices made by the buyer. Why offer student discounts at the movies?

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Thus, seniors have relatively elastic demand, more because of their ability to substitute than because of their income. Can it make consumers better off?

a monopolist that practices perfect price discrimination

Although coupons are widely used in the US, that is not the case in other countries. Why might this improve consumer welfare?

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Price Discrimination