S2W5

Rihanna Loves Profits

Rihanna is studying the different types of price discrimination so she can make the most out of Fenty Beauty's sales. Help her match the definitions:
Price discrimination used as a technique whereby firm induces most elastic buyers to reveal themselves.

• Third degree price discrimination

• Second-degree price discrimination

• Hurdle price discrimination

• First-degree price discrimination

consumers are charged individual prices that capture
all of consumer surplus.

• Third degree price discrimination

• Second-degree price discrimination

• Hurdle price discrimination

• First-degree price discrimination

different quantities of the good sell for different prices

• Third degree price discrimination

• Second-degree price discrimination

• Hurdle price discrimination

• First-degree price discrimination

Different prices are charged in different markets or
to different categories of consumer

• Third degree price discrimination

• Second-degree price discrimination

• Hurdle price discrimination

• First-degree price discrimination

Donald Trump

Donald Trump cannot remember the shutdown condition for monopolies. What is the shutdown condition?

Drew House

Suppose Justin Bieber’s clothing brand is a perfectly discriminating monopolist that faces market demand P = 100 − 10Q and has constant marginal cost M C = 20(with no fixed costs). What is the maximum per period license fee the government could charge the firm and have the firm still stay in business?

Billie Eilish Sells Chocolate?!

Billie Eilish had decided to start selling vegan chocolate bars called ’Happier Than Ever’ in
2021. In trying to understand the market better, she realised that chocolate production is a monopolistic competitive market. In the graph below, if the market the firm is operating in is characterised by monopolistic competition, it will produce:

• 100 units

• 40 units

• 60 units

• between 60 and 80 units

Is Prime Hydration Legit?

KSI and Logan Paul have a monopoly over the energy drink business due to their heavily patented recipe that can boost energy up to 70 per cent. The demand curve for their drink is P=100-2Q and his short-run total cost curve is TC=640+20Q. How much will these YouTubers turned ’boxers’ turned entrepreneurs sell and how much economic profit will they earn at that price?

Chamberlain Coffee, is it Overhyped?

Suppose that Emma Chamberlain, the founder of Chamberlain Coffee, is a monopolist after miraculously taking over the entire coffee industry. Her firm has a demand curve given by P= 100 - Q and a long-run total cost curve given by LTC = 20Q. Find the monopolist’s profit maximising quantity and price.

• Q=20, P=15

• Q=40, P=30

• Q=40, P=60

• Q=100, P=75

Kanye West, the greatest of all time

True or false: Kanye West is really random and decided to open a new drive-in Cinema in Edinburgh. He was wondering if it is true or false that if a monopolist faces a perfectly horizontal demand curve, then the deadweight loss to the economy is zero.

• True

• False