Economics - Price Discrimination Assignment - Module Y

This assignment delves into the principles of price discrimination, exploring scenarios such as peak load pricing and the concept of a dominant strategy. It analyzes how firms like Coles and Woolworths might behave and the implications of their strategic decisions. The assignment also examines externalities, including both negative externalities like cigarette butts and positive externalities like beekeeping, and discusses government interventions like taxes, regulations, and command-and-control methods. It touches upon marginal social costs and the role of government in addressing market failures. This assignment is a valuable resource for students studying economics, particularly those focusing on microeconomic principles and market dynamics.

Michael is first degree price discriminating.
Charging more during River Fire is an example of Peak load pricing.
When compared to Woolworth and Coles, Cotsco could be argued to be engaging in second degree
price discrimination.
If Coles and woolsworth both decide to choose a strategy that results in significant losses for both of
them they are likely facing a dominant strategy.
For statement 2 above, if Coles and Woolsworth follow the strategy resulting in significant losses for
both of them, it would have resulted in them bot playing their dominated strategy.

a. Prisoner’s Dilemma
b. Yes
a. Yes
b. LB
c. Y
d. Y
The marginal social cost of smoking could be represented by a line that is to the right of the
private marginal cost line.

There is an external benefit associated with Jason keeping bees.
In addition to plain packaging the Government could reduce the amount of cigarettes sold through
Increasing tax on cigarettes.
The decision by a shop owner to sweep up cigarette butts on the footpath outside their shop could
be considered a negative externality for the environment.
Banning smoking in public would be an example of the government using Command and Control.
$199.

a. T
b. F
c. F