20 (Figure: Pay Per View Movies on Xfinity Cable) Use Figure: Pay Per View Movies on Xfinity Cable. The figure shows th demand and marginal revenue curves for on-demand movie rentals on Xfinity Cable. Assume that marginal cost and average cost are constant at $30. If the cable company practices perfect price discrimination, consumer surplus will be: Price, Costs, Marginal Revenue $180. $100. $40. $0. $100 90 80 70 60 50 40 30 20 10 0 MR 123456789 Quantity (Number of movie downloads)

20 (Figure: Pay Per View Movies on Xfinity Cable) Use Figure: Pay Per View Movies on Xfinity Cable. The figure shows th demand and marginal revenue curves for on-demand movie rentals on Xfinity Cable. Assume that marginal cost and average cost are constant at $30. If the cable company practices perfect price discrimination, consumer surplus will be: Price, Costs, Marginal Revenue $180. $100. $40. $0. $100 90 80 70 60 50 40 30 20 10 0 MR 123456789 Quantity (Number of movie downloads)

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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33. Rodrigo gets a $1.00 discount by buying Cheerios on the end of the aisle that have a store coupon. Olivia buys the same sized Cheerios at the regular price in the cereal section. Is this price discrimination? True False
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1) You run a small company that provides regular pool service to customers in East Dallas. Like your competitors in the pool service business, you provide pool service 4 times per month but invoice customers for service on a monthly basis. When you raised the monthly price of pool service from $125 to $140, you lost 28 customers, leaving you with 90 pools to service. You believe that your demand curve has constant elasticity and has not shifted since you started your business. a. Estimate your elasticity of demand? b. Given the cost of pool chemicals, gas, wear and tear on your truck and your time, you believe that the marginal cost of servicing an additional pool in East Dallas is $75 per month. What can you say about your optimal price? Was it a good idea to increase your price? Over time, you realize that half of your 90 customers appear to be more price sensitive than the other half. You know that your customers communicate with each other and would be unhappy knowing that they are…
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