Suppose that the amusement park owner can practice perfect first-degree price discrimination by charging a different price
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Suppose that the amusement park owner can practice perfect first-degree price discrimination by charging a different price for each ride. Assume that all rides have zero marginal cost and all consumers have the same tastes. Will the monopolist do better charging for rides and setting a zero price for admission, or better by charging for admission and setting a zero price for rides?
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If he can perfectly price discriminate he can extract the en...View the full answer
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