NB: We will have a study session in MB 220 at 10:30 on Tuesday, Dec. 5.

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Define price discrimination. Is the existence of equality of prices between markets proof that price discrimination does not exist? Explain. What conditions are necessary for a firm to successfully engage in price discrimination?

What is arbitrage?

Is price discrimination harmful to the economy? How does price discrimination affect the total amount of gains from exchange? Explain. Why do colleges often charge students different prices based on income? (See p. 249.)

In your opinion, is college financial aid a form of price discrimination or a sincere act of charity?

Why is cartel maintenance more difficult when there is product variation than than when the products of all firms are identical?

Why do successful cartels sow the seeds for their eventual failure?

(These questions are for Tuesday, November 28th.)

Graphically show a monopolistic firm earning an economic loss. Under what circumstances might a monopoly firm operate while earning economic losses? Why would a firm want monopoly rights to produce a product that it believes would earn an economic loss?

Show a monopoly earning a normal profit.

Why does marginal revenue not equal demand for a monopoly firm?