Asked by Alyssa Squissato on Jun 01, 2024
Verified
(Figure: PPV) Use Figure: PPV.The figure shows the demand and marginal revenue for a pay-per-view football game on cable TV.Assume that the marginal cost and average cost are a constant $40.If the cable company practices perfect price discrimination,deadweight loss will be:
A) $180.
B) $100.
C) $40.
D) $0.
Perfect Price Discrimination
A pricing strategy where a seller charges the maximum price that each consumer is willing to pay, thus capturing the entire consumer surplus.
Deadweight Loss
A loss of economic efficiency that can occur when the equilibrium for a good or service is not achieved, leading to an under or overallocation of resources.
Pay-per-view
A television service allowing viewers to purchase events to be viewed on a private telecast at home.
- Investigate the consequences of price discrimination for consumer surplus and deadweight loss.
Verified Answer
Learning Objectives
- Investigate the consequences of price discrimination for consumer surplus and deadweight loss.
Related questions
(Figure: PPV)Use Figure: PPV ...
When a Monopolist Practices Price Discrimination,compared with a Single-Price Monopolist,deadweight ...
The Consequences of Price Discrimination Are ...
Relative to Simple Pricing,price Discrimination Leads to ...
When a Firm Practices Perfect Price Discrimination ...