a. Suppose the monopolist is able to charge a different price
on each different unit sold. What would be the total
number of rounds of golf sold per week? What would be
the price on the last round sold?
b. What is the area representing consumer surplus in the
absence of any price discrimination?
c. What is the area representing consumer surplus when the
monopolist is practising this “perfect” price
discrimination?
d. Could this monopolist realistically engage in such perfect
price discrimination? Describe a more likely form of price
discrimination that this monopolist could achieve on
Eagle Island.
16. When selling its famous Levi 501 jeans, Levi Strauss price
discriminates between the European and U.S. markets, selling the
product at a higher price in Europe than in the United States. The
following equations are hypothetical demand curves for Levi 501s
in Europe and in the United States. We have expressed the price
in dollars in both markets, and quantity is thousands of units per
year.
a. On separate scale diagrams, one for Europe and one for
the United States, plot the two demand curves.European Demand:QDE = 150 −p
U.S. Demand:QDA = 250 − 4 p