Microeconomics,, 16th Canadian Edition

crude oil and thereby increased the world price of oil by nearly 300 percent. In 1979, further output restrictions led the price ...

DeBeers controls approximately 30 percent of the world’s supply of diamonds through its Diamond Trading Company. Janis Christie/ ...

Notice in all three examples that there are firms outside the cartel. There are many oil producers (including all those in Canad ...

Figure 10-4 The Effect of Cartelizing a Competitive Industry thereby raising price and increasing profits. This is shown in Figu ...

Problems That Cartels Face Cartels encounter two characteristic problems. The first is ensuring that members follow the behaviou ...

Figure 10-5 A Cartel Member’s Incentive to Cheat the competitive level. All the firms will then be back to their competitive pos ...

where its marginal cost is equal to the price set by the cartel. This would allow the firm to earn much larger profits, shown by ...

Another example of a cartel’s instability involves the world coffee market. In 2000, the Association of Coffee Producing Countri ...

quota and the quotas are allocated among existing producers, entry is successfully prevented. This approach is used to limit the ...

economists use game theory, a tool that we introduce and discuss in detail in Chapter 11 . ...

10.3 Price Discrimination So far in this chapter, we have assumed that the monopolist charges the same price for every unit of i ...

prices that vary with the time of day or the season of the year may not represent price discrimination because the same product ...

discrimination is possible and the challenges firms face in designing multiple prices. We then turn to the profit and output eff ...

to pay more for the same good than other consumers are. In this second situation, if the firm is able to determine which consume ...

Paul Springett B/Alamy Stock Photo Prevent Arbitrage Whenever the same product is being sold at different prices, there is an in ...

Figure 10-6 Price Discrimination Among Units of Output Different Forms of Price Discrimination Now that we have seen the conditi ...

Profits can be increased by price discrimination. A single-price monopolist produces where output is and price is this case, pro ...

Price discrimination among units of output sold to the same consumer requires that the firm be able to keep track of the units t ...

Figure 10-7 A Numerical Example of Profitable Price Discrimination and is able to prevent any purchase-and-resale between them. ...

Profit-maximizing price discrimination results in higher prices in those market segments with less elastic demand. The figure sh ...