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Suppose group price discrimination is possible but a firm chooses not to and sets the same price in ...

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Suppose group price discrimination is possible but a firm chooses not to and sets the same price in ...

Suppose group price discrimination is possible but a firm chooses not to and sets the same price in each market. As a result

▸ price elasticity of demand is the same in each market.

▸ the price-inelastic market will buy zero units.

▸ marginal revenue in the more price-elastic market exceeds marginal revenue in the less price-elastic market.

▸ the deadweight loss is less than if the firm price discriminated.

Textbook

Managerial Economics and Strategy

Edition: 3^rd

Authors: Perloff, Brander

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