ECON101 Lecture Notes - Lecture 25: Marginal Cost, Deadweight Loss, Root Mean Square

• School: University of Alberta
• Department: Economics
• Course: ECON101
• Professor: Gordon Lee

Document Summary

Check question 12 (1. 91 & -0. 24 important #s), 15, 23, 25 (squash graph) midterm. = set the price that the monopolist can change or change the price ceiling a. ) First best solution force the monopolist to charge the competition price & produce the competitive output. Fair rate of returning pricing: nationalize. = govt may not maximize pro ts but maximizes social welfare. *eminent domain = govt has the right to take your property if it"s for the good of the public. Also called one to one marketing or personalized pricing. The optimal incarnation of this is perfect price discrimination where each consumer is charged a di erent price for each unit. The rm captures all of consumers" surplus (they"re trying to take away your cs). You don"t have to worry too much about this in real life: second degree. Also called productive versioning, menu pricing, or block pricing. Charge a di erent price based upon quantity demanded.