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3.4.5 Monopoly

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Question 1

Vertex Analytics is a specialized SaaS provider. To maximize total profits, the firm uses third-degree price discrimination, dividing its market into Freelancers (Sub-market A) and Corporate Clients (Sub-market B).

Complete the third-degree price discrimination diagram below. Show the profit-maximising price, output, and area of supernormal (abnormal) profit in each of the two sub-markets: Sub-market A (Freelancers) and Sub-market B (Corporate).

Third-degree price discrimination graph

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3.4.5 Monopoly Questions

  1. A Level
  2. /Economics
  3. /3.4.5 Monopoly