CourseCourseConceptConceptDocsDocuments

AP Microeconomics Prd 3 B B Explain Using Graphs Where Appropriate Equilibrium Firm Decision Making Consumer Surplus Producer Surplus Topic 4 3 Questions

Explain when firms can price discriminate, apply elasticity-based pricing, and calculate how perfect discrimination changes output, profit, surplus, and efficiency.

Syllabus
Effective Fall 2022
Course
AP Microeconomics

Exam points

  • identify the conditions for price discrimination, including market power, separable buyers and prevention of resale
  • set a lower price in the market with more elastic demand and a higher price where demand is less elastic
  • explain how price discrimination can raise a firm's output and economic profit by capturing consumer surplus
  • find perfect-discrimination output where demand equals marginal cost and identify the price of the last unit
  • compare perfect discrimination with one-price monopoly using consumer surplus, producer surplus and deadweight loss

AP Microeconomics Prd 3 B B Explain Using Graphs Where Appropriate Equilibrium Firm Decision Making Consumer Surplus Producer Surplus Topic 4 3 Questions question 1

[Maximum number: 2]

The graph below shows the demand curve (D), marginal revenue curve (MR), marginal cost curve (MC), average total cost curve (ATC), and long-run average total cost curve (LRATC) for a monopolist.

Figure for Question AP Microeconomics Prd 3 B B Explain Using Graphs Where Appropriate Equilibrium Firm Decision Making Consumer Surplus Producer Surplus Topic 4 3 Questions question 1 — AP Microeconomics

Question (a)

(a)

Suppose the monopolist perfectly price discriminates and chooses the quantity that maximizes profit. Determine the dollar value of each of the following.

[ 2 ]

Question (i)

(i)

The monopolist's profit

[ 1 ]

Question (ii)

(ii)

The consumer surplus

[ 1 ]
All question bank results loaded