Question: (a) Question 3 Happy Town, a small isolated town, has one private doctor. For a 15-minute consultation, the doctor charges a rich person twice as
(a) Question 3 Happy Town, a small isolated town, has one private doctor. For a 15-minute consultation, the doctor charges a rich person twice as much as a poor person. What conditions are necessary for price discrimination to occur? (3 marks) (b) Can we say that the above doctor is practicing price discrimination in this small isolated town? Explain your answer. (3 marks) (c) With this pricing system, is there any redistribution of consumer surplus when comparing with a single monopoly pricing system? (2 marks) (d) If the doctor decided to charge everyone the maximum price that he or she would be willing to pay, is there any consumer surplus left for the consumer? If yes, please indicate the area of consumer surplus in a relevant diagram. (4 marks) (e) Apart from the pricing method in (d), can you suggest TWO other pricing methods the doctor can use to maximize his total revenue? Explain your answers. (8 marks) (Total 20 marks)
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