Week 10

Question 1

consumer surplus definition

Answer 1

Question 2

price discrimination definition

Answer 2

Question 3

1st degree price discrimination

Answer 3

Question 4

pros and cons of first degree price discrimination

Answer 4

Question 5

2nd degree price discrimination

Answer 5

Question 6

3rd degree price discrimination

Answer 6

Question 7

con of third degree price discrimination

Answer 7

Question 8

what are the 4 criteria in order to price discriminate

Answer 8

Question 9

do all consumers lose out to price discrimination

Answer 9

largely true, but not necessarily for all consumers

consumers: A and B have clearly lost out they would’ve payed £30 but now paying £40

consumers: D is being charged less than the original price and their estimate therefore gaining consumer surplus

Consumer: E wouldn’t have bought it at £30 but pays it at £20

So price discrimination can actually increase the number of consumers who end up receiving a product

Question 10

1st degree price discrimination diagrammatically

Answer 10

Question 11

3rd degree price discrimination on a demand and supply graph

Answer 11