PPT-Lecture 1: Optimal Pricing for Monopoly with Multiple Goods

Jacob LaRiviere 1 Composite Commodity Theory Assume there are n goods eg apples bananas carrots etc but we really only care about one of them eg apples How do we handle this problem as economists. Bi kh Bh tt ac arya Professor Department of Mechanical Engineering IIT Kanpur Joint Initiative of IITs and IISc Funded by MHRD brPage 2br NPTEL Mechanical Engineering Modeling and Control of Dynamic electroMechanical System Module 4 Lecture 33 Jo Strategies. ©ARC Consulting cc 2012. ©ARC Consulting cc 2012. Penetration Pricing. ©ARC Consulting cc 2012. Penetration Pricing. Prices . set to ‘penetrate the market’. ‘Low’ price to secure high volumes. • How Monopolies Form and Survive: Barriers to Entry. • How a Profit-Maximizing Monopoly Chooses Output and Price. • What are the Welfare Effects of a Monopoly. A . pure. monopoly is where . one. MARKET STRUCTURE . in which only . ONE . seller sells a product for which there are no close substitutes.. A monopoly is . A PRICE SETTER. , . RESTRICTS THE MARKET . and. IS THE ONLY SELLER.. Monopoly. The US justice department filed antitrust charges against Microsoft. In 2000 the court declared that Microsoft was a monopoly.. In 2008, the European Commission sent Intel Corp. a new set of antitrust charges for abuse of dominant position with the goal of excluding its main rival from the x86 central processing units market. Keith Dalbey, Ph.D.. Sandia National Labs, Dept 1441, Optimization and Uncertainty Quantification. Michael Levy, Ph.D.. Sandia National Labs, Dept 1442, Numerical Analysis and Applications. Sandia is a multiprogram laboratory operated by Sandia Corporation, a Lockheed Martin Company, for the United States Department of Energy’s National Nuclear Security Administration under Contract DE-AC04-94AL85000.. Introduction. In economics, a monopoly is defined as a persistent market situation where there is only one provider of a product or service. Monopolies are characterized by a lack of economic competition for the good or service that they provide and a lack of viable substitute goods.. 12.1 Introducing a New Market Structure. 12.2 Sources of Market Power. 12.3 The Monopolist’s Problem. 12.4 Choosing the Optimal Quantity and Price. 12.5 The “Broken” Invisible Hand: . The Cost . ?. Pricing . is a marketing function in which both a buyer . and. a seller . perceive the . most favorable value . for a good or service. 2. Price– You get what you pay for…. What does that phrase mean to you?. Lecture 11. Formation defenses and performance excuses Lecture outline General principles for enforcing contracts Regulating contracts Formation defenses (irrationality, dire constraints) Performance excuses (impossibility, frustration of purpose, mistakes) DR. MRIGANKA DE SARKAR. ASSOCIATE PROFESSOR OF ECONOMICS. CONTACT: et_mit@yahoo.co.in. Monopoly: Why?. Natural monopoly (increasing returns to scale), e.g. (parts of) utility companies?. Artificial monopoly. Pure Monopoly. A monopolized market has a single seller.. The monopolist’s demand curve is the (downward sloping) market demand curve.. So the monopolist can alter the market price by adjusting its output level.. Graph Time . Regular Monopoly . Natural Monopoly. Welfare Effects of Monopoly. Under a perfect competition the market price is the sales price leading to an efficient outcome, both productively and allocatively . What are the four . barriers to entry. .. Why . monopolists. are constrained by demand.. How . monopolists. set price and quantity.. What . social welfare. losses are associated with monopolies.. What the common public policy responses to monopolies are..