Monopoly Behavior презентация
Содержание
- 2. A Scotsman phones a dentist to inquire about the cost for
- 3. — "I can't guarantee their professionalism and it'll be painful. But
- 4. How Should a Monopoly Price? So far a monopoly has been
- 5. Capturing Consumer Surplus All pricing strategies we will examine are means
- 6. Capturing Consumer Surplus
- 7. Capturing Consumer Surplus Price discrimination is the practice of charging different
- 8. Price discrimination Price discrimination requires the absence of resale
- 9. Types of Price Discrimination 1st-degree: Each output unit is sold at
- 10. Types of Price Discrimination 3rd-degree: Price paid by buyers in a
- 11. First-degree Price Discrimination Each output unit is sold at a different
- 12. First-degree Price Discrimination
- 13. First-degree Price Discrimination
- 14. First-degree Price Discrimination
- 15. First-degree Price Discrimination
- 16. First-degree Price Discrimination
- 17. First-degree Price Discrimination
- 18. Fig. 25.2
- 19. First-degree Price Discrimination First-degree price discrimination gives a monopolist all of
- 20. First-Degree Price Discrimination In practice, perfect price discrimination is almost never
- 21. First-Degree Price Discrimination Examples of imperfect price discrimination where the seller
- 22. Second-Degree Price Discrimination In some markets, consumers purchase many units of
- 23. Second-Degree Price Discrimination Quantity discounts are an example of second-degree price
- 24. Second-Degree Price Discrimination
- 25. Fig. 25.3
- 26. Fig. 25.3
- 27. Fig. 25.3
- 28. Fig. 25.3
- 29. Third-degree Price Discrimination Price paid by buyers in a given group
- 30. Third-degree Price Discrimination A monopolist manipulates market price by altering the
- 31. PRICE DISCRIMINATION
- 32. PRICE DISCRIMINATION
- 33. PRICE DISCRIMINATION
- 34. Third-degree Price Discrimination
- 35. Third-degree Price Discrimination
- 36. Third-degree Price Discrimination In which market will the monopolist cause the
- 37. Third-degree Price Discrimination In which market will the monopolist cause the
- 38. Third-degree Price Discrimination In which market will the monopolist cause the
- 39. Third-degree Price Discrimination
- 40. Third-degree Price Discrimination
- 41. Third-degree Price Discrimination
- 42. Third-degree Price Discrimination
- 43. No Sales to Smaller Market Even if third-degree price discrimination is
- 44. No Sales to Smaller Market
- 45. The Economics of Coupons and Rebates Those consumers who are more
- 46. The Economics of Coupons and Rebates About 20 – 30% of
- 47. Price Elasticities of Demand: Users vs. Nonusers of Coupons
- 48. Airline Fares Differences in elasticities imply that some customers will pay
- 49. Elasticities of Demand for Air Travel
- 50. Airline Fares There are multiple fares for every route flown by
- 51. Other Types of Price Discrimination Intertemporal Price Discrimination Practice of separating
- 52. Intertemporal Price Discrimination Once this market has yielded a maximum profit,
- 53. Intertemporal Price Discrimination
- 54. Other Types of Price Discrimination Peak-Load Pricing Practice of charging higher
- 55. Peak-Load Pricing Objective is to increase efficiency by charging customers close
- 56. Peak-Load Pricing With third-degree price discrimination, the MR for all markets
- 57. Peak-Load Pricing
- 58. How to Price a Best-Selling Novel How would you arrive at
- 59. How to Price a Best-Selling Novel Company must divide consumers into
- 60. How to Price a Best-Selling Novel Publishers must use estimates of
- 61. Two-Part Tariffs A two-part tariff is a lump-sum fee, p1, plus
- 62. Two-Part Tariffs Should a monopolist prefer a two-part tariff to uniform
- 63. Two-Part Tariffs p1 + p2x Q: What is the largest that
- 64. Two-Part Tariffs p1 + p2x Q: What is the largest that
- 65. Two-Part Tariffs
- 66. Two-Part Tariffs
- 67. Two-Part Tariffs
- 68. Two-Part Tariffs
- 69. Two-Part Tariffs
- 70. Two-Part Tariffs
- 71. Two-Part Tariffs
- 72. Two-Part Tariffs
- 73. Two-Part Tariffs
- 74. Two-Part Tariffs
- 75. Two-Part Tariffs The monopolist maximizes its profit when using a two-part
- 76. Two-Part Tariffs A profit-maximizing two-part tariff gives an efficient market outcome
- 77. The Two-Part Tariff Form of pricing in which consumers are charged
- 78. The Two-Part Tariff Pricing decision is setting the entry fee (T)
- 79. Two-Part Tariff with a Single Consumer
- 80. Two-Part Tariff with Two Consumers Two consumers, but firm can only
- 81. Two-Part Tariff with Two Consumers
- 82. Two-Part Tariff with Two Consumers Firm should set usage fee above
- 83. The Two-Part Tariff with Many Consumers No exact way to determine
- 84. The Two-Part Tariff with Many Consumers To find optimum combination, choose
- 85. Two-Part Tariff with Many Different Consumers
- 86. The Two-Part Tariff Rule of Thumb Similar demand: Choose P close
- 87. The Two-Part Tariff With a Twist Entry price (T) entitles the
- 88. Polaroid Cameras In 1971, Polaroid introduced the SX-70 camera Polaroid was
- 89. Polaroid Cameras Buying camera is like entry fee Unlike an amusement
- 90. Polaroid Cameras Analytical framework:
- 91. Polaroid Cameras In the end, the film prices were significantly above
- 92. Bundling Bundling is packaging two or more products to gain a
- 93. Bundling When film company leased “Gone with the Wind,” it required
- 94. Bundling Renting the movies separately would result in each theater paying
- 95. Bundling If the movies are bundled: Theater A will pay $15,000
- 96. Relative Valuations More profitable to bundle because relative valuation of two
- 97. Relative Valuations If the demands were positively correlated (Theater A would
- 98. Bundling If the movies are bundled: Theater A will pay $16,000
- 99. Bundling Bundling Scenario: Two different goods and many consumers Many consumers
- 100. Reservation Prices
- 101. Consumption Decisions When Products are Sold Separately
- 102. Consumption Decisions When Products are Bundled
- 103. Consumption Decisions When Products are Bundled The effectiveness of bundling depends
- 104. Reservation Prices
- 105. Reservation Prices
- 106. Movie Example
- 107. Mixed Bundling Practice of selling two or more goods both as
- 108. Mixed Versus Pure Bundling
- 109. Mixed Bundling – Example Demands are perfectly negatively correlated but significant
- 110. Mixed Bundling – Example We can see the effects under different
- 111. Bundling If MC is zero, mixed bundling can still be more
- 112. Mixed Bundling with Zero Marginal Costs
- 113. Bundling in Practice Car purchasing Bundles of options such as electric
- 114. Bundling Mixed Bundling in Practice Use of market surveys to determine
- 115. Mixed Bundling in Practice
- 116. A Restaurant’s Pricing Problem
- 117. Tying The practice of requiring a customer to purchase one good
- 118. Tying Allows the seller to meter the customer and use a
- 119. Versioning Extreme example: damaged goods Intel 486 486SX - $333 in
- 120. Durable-goods pricing Waiting for the price cut. Non-price discrimination seems to
- 121. Advertising Firms with market power have to decide how much to
- 122. Advertising Assumptions Firm sets only one price for product Firm knows
- 123. ADVERTISING
- 126. Advertising A Rule of Thumb for Advertising To maximize profit, the
- 127. Advertising An Example R(Q) = $1 million/yr $10,000 budget for A
- 128. Advertising The firm in our example should increase advertising A/PQ =
- 129. Advertising – In Practice Estimate the level of advertising for each
- 130. Скачать презентацию
![Monopoly Behavior Monopoly Behavior](/documents_3/32885beee4903640bf59a06d15103026/img0.jpg)
![A Scotsman phones a dentist to inquire about the cost for A Scotsman phones a dentist to inquire about the cost for](/documents_3/32885beee4903640bf59a06d15103026/img1.jpg)
![— "I can't guarantee their professionalism and it'll be painful. But — "I can't guarantee their professionalism and it'll be painful. But](/documents_3/32885beee4903640bf59a06d15103026/img2.jpg)
![How Should a Monopoly Price?
So far a monopoly has been How Should a Monopoly Price?
So far a monopoly has been](/documents_3/32885beee4903640bf59a06d15103026/img3.jpg)
![Capturing Consumer Surplus
All pricing strategies we will examine are means Capturing Consumer Surplus
All pricing strategies we will examine are means](/documents_3/32885beee4903640bf59a06d15103026/img4.jpg)
![Capturing Consumer Surplus Capturing Consumer Surplus](/documents_3/32885beee4903640bf59a06d15103026/img5.jpg)
![Capturing Consumer Surplus
Price discrimination is the practice of charging different Capturing Consumer Surplus
Price discrimination is the practice of charging different](/documents_3/32885beee4903640bf59a06d15103026/img6.jpg)
![Price discrimination
Price discrimination requires the absence of resale Price discrimination
Price discrimination requires the absence of resale](/documents_3/32885beee4903640bf59a06d15103026/img7.jpg)
![Types of Price Discrimination
1st-degree: Each output unit is sold at Types of Price Discrimination
1st-degree: Each output unit is sold at](/documents_3/32885beee4903640bf59a06d15103026/img8.jpg)
![Types of Price Discrimination
3rd-degree: Price paid by buyers in a Types of Price Discrimination
3rd-degree: Price paid by buyers in a](/documents_3/32885beee4903640bf59a06d15103026/img9.jpg)
![First-degree Price Discrimination
Each output unit is sold at a different First-degree Price Discrimination
Each output unit is sold at a different](/documents_3/32885beee4903640bf59a06d15103026/img10.jpg)
![First-degree Price Discrimination First-degree Price Discrimination](/documents_3/32885beee4903640bf59a06d15103026/img11.jpg)
![First-degree Price Discrimination First-degree Price Discrimination](/documents_3/32885beee4903640bf59a06d15103026/img12.jpg)
![First-degree Price Discrimination First-degree Price Discrimination](/documents_3/32885beee4903640bf59a06d15103026/img13.jpg)
![First-degree Price Discrimination First-degree Price Discrimination](/documents_3/32885beee4903640bf59a06d15103026/img14.jpg)
![First-degree Price Discrimination First-degree Price Discrimination](/documents_3/32885beee4903640bf59a06d15103026/img15.jpg)
![First-degree Price Discrimination First-degree Price Discrimination](/documents_3/32885beee4903640bf59a06d15103026/img16.jpg)
![Fig. 25.2 Fig. 25.2](/documents_3/32885beee4903640bf59a06d15103026/img17.jpg)
![First-degree Price Discrimination
First-degree price discrimination gives a monopolist all of First-degree Price Discrimination
First-degree price discrimination gives a monopolist all of](/documents_3/32885beee4903640bf59a06d15103026/img18.jpg)
![First-Degree Price Discrimination
In practice, perfect price discrimination is almost never First-Degree Price Discrimination
In practice, perfect price discrimination is almost never](/documents_3/32885beee4903640bf59a06d15103026/img19.jpg)
![First-Degree Price Discrimination
Examples of imperfect price discrimination where the seller First-Degree Price Discrimination
Examples of imperfect price discrimination where the seller](/documents_3/32885beee4903640bf59a06d15103026/img20.jpg)
![Second-Degree Price Discrimination
In some markets, consumers purchase many units of Second-Degree Price Discrimination
In some markets, consumers purchase many units of](/documents_3/32885beee4903640bf59a06d15103026/img21.jpg)
![Second-Degree Price Discrimination
Quantity discounts are an example of second-degree price Second-Degree Price Discrimination
Quantity discounts are an example of second-degree price](/documents_3/32885beee4903640bf59a06d15103026/img22.jpg)
![Second-Degree Price Discrimination Second-Degree Price Discrimination](/documents_3/32885beee4903640bf59a06d15103026/img23.jpg)
![Fig. 25.3 Fig. 25.3](/documents_3/32885beee4903640bf59a06d15103026/img24.jpg)
![Fig. 25.3 Fig. 25.3](/documents_3/32885beee4903640bf59a06d15103026/img25.jpg)
![Fig. 25.3 Fig. 25.3](/documents_3/32885beee4903640bf59a06d15103026/img26.jpg)
![Fig. 25.3 Fig. 25.3](/documents_3/32885beee4903640bf59a06d15103026/img27.jpg)
![Third-degree Price Discrimination
Price paid by buyers in a given group Third-degree Price Discrimination
Price paid by buyers in a given group](/documents_3/32885beee4903640bf59a06d15103026/img28.jpg)
![Third-degree Price Discrimination
A monopolist manipulates market price by altering the Third-degree Price Discrimination
A monopolist manipulates market price by altering the](/documents_3/32885beee4903640bf59a06d15103026/img29.jpg)
![PRICE DISCRIMINATION PRICE DISCRIMINATION](/documents_3/32885beee4903640bf59a06d15103026/img30.jpg)
![PRICE DISCRIMINATION PRICE DISCRIMINATION](/documents_3/32885beee4903640bf59a06d15103026/img31.jpg)
![PRICE DISCRIMINATION PRICE DISCRIMINATION](/documents_3/32885beee4903640bf59a06d15103026/img32.jpg)
![Third-degree Price Discrimination Third-degree Price Discrimination](/documents_3/32885beee4903640bf59a06d15103026/img33.jpg)
![Third-degree Price Discrimination Third-degree Price Discrimination](/documents_3/32885beee4903640bf59a06d15103026/img34.jpg)
![Third-degree Price Discrimination
In which market will the monopolist cause the Third-degree Price Discrimination
In which market will the monopolist cause the](/documents_3/32885beee4903640bf59a06d15103026/img35.jpg)
![Third-degree Price Discrimination
In which market will the monopolist cause the Third-degree Price Discrimination
In which market will the monopolist cause the](/documents_3/32885beee4903640bf59a06d15103026/img36.jpg)
![Third-degree Price Discrimination
In which market will the monopolist cause the Third-degree Price Discrimination
In which market will the monopolist cause the](/documents_3/32885beee4903640bf59a06d15103026/img37.jpg)
![Third-degree Price Discrimination Third-degree Price Discrimination](/documents_3/32885beee4903640bf59a06d15103026/img38.jpg)
![Third-degree Price Discrimination Third-degree Price Discrimination](/documents_3/32885beee4903640bf59a06d15103026/img39.jpg)
![Third-degree Price Discrimination Third-degree Price Discrimination](/documents_3/32885beee4903640bf59a06d15103026/img40.jpg)
![Third-degree Price Discrimination Third-degree Price Discrimination](/documents_3/32885beee4903640bf59a06d15103026/img41.jpg)
![No Sales to Smaller Market
Even if third-degree price discrimination is No Sales to Smaller Market
Even if third-degree price discrimination is](/documents_3/32885beee4903640bf59a06d15103026/img42.jpg)
![No Sales to Smaller Market No Sales to Smaller Market](/documents_3/32885beee4903640bf59a06d15103026/img43.jpg)
![The Economics of Coupons and Rebates
Those consumers who are The Economics of Coupons and Rebates
Those consumers who are](/documents_3/32885beee4903640bf59a06d15103026/img44.jpg)
![The Economics of Coupons and Rebates
About 20 – 30% The Economics of Coupons and Rebates
About 20 – 30%](/documents_3/32885beee4903640bf59a06d15103026/img45.jpg)
![Price Elasticities of Demand: Users vs. Nonusers of Coupons Price Elasticities of Demand: Users vs. Nonusers of Coupons](/documents_3/32885beee4903640bf59a06d15103026/img46.jpg)
![Airline Fares
Differences in elasticities imply that some customers will pay Airline Fares
Differences in elasticities imply that some customers will pay](/documents_3/32885beee4903640bf59a06d15103026/img47.jpg)
![Elasticities of Demand for Air Travel Elasticities of Demand for Air Travel](/documents_3/32885beee4903640bf59a06d15103026/img48.jpg)
![Airline Fares
There are multiple fares for every route flown by Airline Fares
There are multiple fares for every route flown by](/documents_3/32885beee4903640bf59a06d15103026/img49.jpg)
![Other Types of Price Discrimination
Intertemporal Price Discrimination
Practice of separating Other Types of Price Discrimination
Intertemporal Price Discrimination
Practice of separating](/documents_3/32885beee4903640bf59a06d15103026/img50.jpg)
![Intertemporal Price Discrimination
Once this market has yielded a maximum profit, Intertemporal Price Discrimination
Once this market has yielded a maximum profit,](/documents_3/32885beee4903640bf59a06d15103026/img51.jpg)
![Intertemporal Price Discrimination Intertemporal Price Discrimination](/documents_3/32885beee4903640bf59a06d15103026/img52.jpg)
![Other Types of Price Discrimination
Peak-Load Pricing
Practice of charging higher Other Types of Price Discrimination
Peak-Load Pricing
Practice of charging higher](/documents_3/32885beee4903640bf59a06d15103026/img53.jpg)
![Peak-Load Pricing
Objective is to increase efficiency by charging customers close Peak-Load Pricing
Objective is to increase efficiency by charging customers close](/documents_3/32885beee4903640bf59a06d15103026/img54.jpg)
![Peak-Load Pricing
With third-degree price discrimination, the MR for all markets Peak-Load Pricing
With third-degree price discrimination, the MR for all markets](/documents_3/32885beee4903640bf59a06d15103026/img55.jpg)
![Peak-Load Pricing Peak-Load Pricing](/documents_3/32885beee4903640bf59a06d15103026/img56.jpg)
![How to Price a Best-Selling Novel
How would you arrive at How to Price a Best-Selling Novel
How would you arrive at](/documents_3/32885beee4903640bf59a06d15103026/img57.jpg)
![How to Price a Best-Selling Novel
Company must divide consumers into How to Price a Best-Selling Novel
Company must divide consumers into](/documents_3/32885beee4903640bf59a06d15103026/img58.jpg)
![How to Price a Best-Selling Novel
Publishers must use estimates of How to Price a Best-Selling Novel
Publishers must use estimates of](/documents_3/32885beee4903640bf59a06d15103026/img59.jpg)
![Two-Part Tariffs
A two-part tariff is a lump-sum fee, p1, plus Two-Part Tariffs
A two-part tariff is a lump-sum fee, p1, plus](/documents_3/32885beee4903640bf59a06d15103026/img60.jpg)
![Two-Part Tariffs
Should a monopolist prefer a two-part tariff to uniform Two-Part Tariffs
Should a monopolist prefer a two-part tariff to uniform](/documents_3/32885beee4903640bf59a06d15103026/img61.jpg)
![Two-Part Tariffs
p1 + p2x
Q: What is the largest Two-Part Tariffs
p1 + p2x
Q: What is the largest](/documents_3/32885beee4903640bf59a06d15103026/img62.jpg)
![Two-Part Tariffs
p1 + p2x
Q: What is the largest Two-Part Tariffs
p1 + p2x
Q: What is the largest](/documents_3/32885beee4903640bf59a06d15103026/img63.jpg)
![Two-Part Tariffs Two-Part Tariffs](/documents_3/32885beee4903640bf59a06d15103026/img64.jpg)
![Two-Part Tariffs Two-Part Tariffs](/documents_3/32885beee4903640bf59a06d15103026/img65.jpg)
![Two-Part Tariffs Two-Part Tariffs](/documents_3/32885beee4903640bf59a06d15103026/img66.jpg)
![Two-Part Tariffs Two-Part Tariffs](/documents_3/32885beee4903640bf59a06d15103026/img67.jpg)
![Two-Part Tariffs Two-Part Tariffs](/documents_3/32885beee4903640bf59a06d15103026/img68.jpg)
![Two-Part Tariffs Two-Part Tariffs](/documents_3/32885beee4903640bf59a06d15103026/img69.jpg)
![Two-Part Tariffs Two-Part Tariffs](/documents_3/32885beee4903640bf59a06d15103026/img70.jpg)
![Two-Part Tariffs Two-Part Tariffs](/documents_3/32885beee4903640bf59a06d15103026/img71.jpg)
![Two-Part Tariffs Two-Part Tariffs](/documents_3/32885beee4903640bf59a06d15103026/img72.jpg)
![Two-Part Tariffs Two-Part Tariffs](/documents_3/32885beee4903640bf59a06d15103026/img73.jpg)
![Two-Part Tariffs
The monopolist maximizes its profit when using a two-part Two-Part Tariffs
The monopolist maximizes its profit when using a two-part](/documents_3/32885beee4903640bf59a06d15103026/img74.jpg)
![Two-Part Tariffs
A profit-maximizing two-part tariff gives an efficient market outcome Two-Part Tariffs
A profit-maximizing two-part tariff gives an efficient market outcome](/documents_3/32885beee4903640bf59a06d15103026/img75.jpg)
![The Two-Part Tariff
Form of pricing in which consumers are charged The Two-Part Tariff
Form of pricing in which consumers are charged](/documents_3/32885beee4903640bf59a06d15103026/img76.jpg)
![The Two-Part Tariff
Pricing decision is setting the entry fee (T) The Two-Part Tariff
Pricing decision is setting the entry fee (T)](/documents_3/32885beee4903640bf59a06d15103026/img77.jpg)
![Two-Part Tariff with a Single Consumer Two-Part Tariff with a Single Consumer](/documents_3/32885beee4903640bf59a06d15103026/img78.jpg)
![Two-Part Tariff with Two Consumers
Two consumers, but firm can only Two-Part Tariff with Two Consumers
Two consumers, but firm can only](/documents_3/32885beee4903640bf59a06d15103026/img79.jpg)
![Two-Part Tariff with Two Consumers Two-Part Tariff with Two Consumers](/documents_3/32885beee4903640bf59a06d15103026/img80.jpg)
![Two-Part Tariff with Two Consumers
Firm should set usage fee above Two-Part Tariff with Two Consumers
Firm should set usage fee above](/documents_3/32885beee4903640bf59a06d15103026/img81.jpg)
![The Two-Part Tariff with Many Consumers
No exact way to determine The Two-Part Tariff with Many Consumers
No exact way to determine](/documents_3/32885beee4903640bf59a06d15103026/img82.jpg)
![The Two-Part Tariff with Many Consumers
To find optimum combination, choose The Two-Part Tariff with Many Consumers
To find optimum combination, choose](/documents_3/32885beee4903640bf59a06d15103026/img83.jpg)
![Two-Part Tariff with Many Different Consumers Two-Part Tariff with Many Different Consumers](/documents_3/32885beee4903640bf59a06d15103026/img84.jpg)
![The Two-Part Tariff
Rule of Thumb
Similar demand: Choose P close The Two-Part Tariff
Rule of Thumb
Similar demand: Choose P close](/documents_3/32885beee4903640bf59a06d15103026/img85.jpg)
![The Two-Part Tariff With a Twist
Entry price (T) entitles the The Two-Part Tariff With a Twist
Entry price (T) entitles the](/documents_3/32885beee4903640bf59a06d15103026/img86.jpg)
![Polaroid Cameras
In 1971, Polaroid introduced the SX-70 camera
Polaroid was Polaroid Cameras
In 1971, Polaroid introduced the SX-70 camera
Polaroid was](/documents_3/32885beee4903640bf59a06d15103026/img87.jpg)
![Polaroid Cameras
Buying camera is like entry fee
Unlike an amusement Polaroid Cameras
Buying camera is like entry fee
Unlike an amusement](/documents_3/32885beee4903640bf59a06d15103026/img88.jpg)
![Polaroid Cameras
Analytical framework: Polaroid Cameras
Analytical framework:](/documents_3/32885beee4903640bf59a06d15103026/img89.jpg)
![Polaroid Cameras
In the end, the film prices were significantly above Polaroid Cameras
In the end, the film prices were significantly above](/documents_3/32885beee4903640bf59a06d15103026/img90.jpg)
![Bundling
Bundling is packaging two or more products to gain a Bundling
Bundling is packaging two or more products to gain a](/documents_3/32885beee4903640bf59a06d15103026/img91.jpg)
![Bundling
When film company leased “Gone with the Wind,” it required Bundling
When film company leased “Gone with the Wind,” it required](/documents_3/32885beee4903640bf59a06d15103026/img92.jpg)
![Bundling
Renting the movies separately would result in each theater paying Bundling
Renting the movies separately would result in each theater paying](/documents_3/32885beee4903640bf59a06d15103026/img93.jpg)
![Bundling
If the movies are bundled:
Theater A will pay $15,000 Bundling
If the movies are bundled:
Theater A will pay $15,000](/documents_3/32885beee4903640bf59a06d15103026/img94.jpg)
![Relative Valuations
More profitable to bundle because relative valuation of two Relative Valuations
More profitable to bundle because relative valuation of two](/documents_3/32885beee4903640bf59a06d15103026/img95.jpg)
![Relative Valuations
If the demands were positively correlated (Theater A would Relative Valuations
If the demands were positively correlated (Theater A would](/documents_3/32885beee4903640bf59a06d15103026/img96.jpg)
![Bundling
If the movies are bundled:
Theater A will pay $16,000 Bundling
If the movies are bundled:
Theater A will pay $16,000](/documents_3/32885beee4903640bf59a06d15103026/img97.jpg)
![Bundling
Bundling Scenario: Two different goods and many consumers
Many consumers Bundling
Bundling Scenario: Two different goods and many consumers
Many consumers](/documents_3/32885beee4903640bf59a06d15103026/img98.jpg)
![Reservation Prices Reservation Prices](/documents_3/32885beee4903640bf59a06d15103026/img99.jpg)
![Consumption Decisions When Products are Sold Separately Consumption Decisions When Products are Sold Separately](/documents_3/32885beee4903640bf59a06d15103026/img100.jpg)
![Consumption Decisions When Products are Bundled Consumption Decisions When Products are Bundled](/documents_3/32885beee4903640bf59a06d15103026/img101.jpg)
![Consumption Decisions When Products are Bundled
The effectiveness of bundling depends Consumption Decisions When Products are Bundled
The effectiveness of bundling depends](/documents_3/32885beee4903640bf59a06d15103026/img102.jpg)
![Reservation Prices Reservation Prices](/documents_3/32885beee4903640bf59a06d15103026/img103.jpg)
![Reservation Prices Reservation Prices](/documents_3/32885beee4903640bf59a06d15103026/img104.jpg)
![Movie Example Movie Example](/documents_3/32885beee4903640bf59a06d15103026/img105.jpg)
![Mixed Bundling
Practice of selling two or more goods both as Mixed Bundling
Practice of selling two or more goods both as](/documents_3/32885beee4903640bf59a06d15103026/img106.jpg)
![Mixed Versus Pure Bundling Mixed Versus Pure Bundling](/documents_3/32885beee4903640bf59a06d15103026/img107.jpg)
![Mixed Bundling – Example
Demands are perfectly negatively correlated but significant Mixed Bundling – Example
Demands are perfectly negatively correlated but significant](/documents_3/32885beee4903640bf59a06d15103026/img108.jpg)
![Mixed Bundling – Example
We can see the effects under different Mixed Bundling – Example
We can see the effects under different](/documents_3/32885beee4903640bf59a06d15103026/img109.jpg)
![Bundling
If MC is zero, mixed bundling can still be more Bundling
If MC is zero, mixed bundling can still be more](/documents_3/32885beee4903640bf59a06d15103026/img110.jpg)
![Mixed Bundling with Zero Marginal Costs Mixed Bundling with Zero Marginal Costs](/documents_3/32885beee4903640bf59a06d15103026/img111.jpg)
![Bundling in Practice
Car purchasing
Bundles of options such as electric Bundling in Practice
Car purchasing
Bundles of options such as electric](/documents_3/32885beee4903640bf59a06d15103026/img112.jpg)
![Bundling
Mixed Bundling in Practice
Use of market surveys to determine Bundling
Mixed Bundling in Practice
Use of market surveys to determine](/documents_3/32885beee4903640bf59a06d15103026/img113.jpg)
![Mixed Bundling in Practice Mixed Bundling in Practice](/documents_3/32885beee4903640bf59a06d15103026/img114.jpg)
![A Restaurant’s Pricing Problem A Restaurant’s Pricing Problem](/documents_3/32885beee4903640bf59a06d15103026/img115.jpg)
![Tying
The practice of requiring a customer to purchase one good Tying
The practice of requiring a customer to purchase one good](/documents_3/32885beee4903640bf59a06d15103026/img116.jpg)
![Tying
Allows the seller to meter the customer and use a Tying
Allows the seller to meter the customer and use a](/documents_3/32885beee4903640bf59a06d15103026/img117.jpg)
![Versioning
Extreme example: damaged goods
Intel 486
486SX - $333 Versioning
Extreme example: damaged goods
Intel 486
486SX - $333](/documents_3/32885beee4903640bf59a06d15103026/img118.jpg)
![Durable-goods pricing
Waiting for the price cut.
Non-price discrimination seems to Durable-goods pricing
Waiting for the price cut.
Non-price discrimination seems to](/documents_3/32885beee4903640bf59a06d15103026/img119.jpg)
![Advertising
Firms with market power have to decide how much to Advertising
Firms with market power have to decide how much to](/documents_3/32885beee4903640bf59a06d15103026/img120.jpg)
![Advertising
Assumptions
Firm sets only one price for product
Firm knows Advertising
Assumptions
Firm sets only one price for product
Firm knows](/documents_3/32885beee4903640bf59a06d15103026/img121.jpg)
![ADVERTISING ADVERTISING](/documents_3/32885beee4903640bf59a06d15103026/img122.jpg)
![](/documents_3/32885beee4903640bf59a06d15103026/img123.jpg)
![](/documents_3/32885beee4903640bf59a06d15103026/img124.jpg)
![Advertising
A Rule of Thumb for Advertising
To maximize profit, the Advertising
A Rule of Thumb for Advertising
To maximize profit, the](/documents_3/32885beee4903640bf59a06d15103026/img125.jpg)
![Advertising
An Example
R(Q) = $1 million/yr
$10,000 budget for A Advertising
An Example
R(Q) = $1 million/yr
$10,000 budget for A](/documents_3/32885beee4903640bf59a06d15103026/img126.jpg)
![Advertising
The firm in our example should increase advertising
A/PQ = Advertising
The firm in our example should increase advertising
A/PQ =](/documents_3/32885beee4903640bf59a06d15103026/img127.jpg)
![Advertising – In Practice
Estimate the level of advertising for each Advertising – In Practice
Estimate the level of advertising for each](/documents_3/32885beee4903640bf59a06d15103026/img128.jpg)
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