# microeconomics

posted by .

If a university faces a downward sloping, linear demand curve for the undergraduate education that it provides and is able to engage in perfect, first degree price discrimination(through obtaining detailed financial information from each prospective student and offering different levels of financial aid), then the university’s marginal and average revenue curves will be identical.” Explain why this statement is true, false or uncertain.

• microeconomics -

Tough question. I believe the statement is false. For a perfect price-discriminating monopolist, the demand curve is also the MR curve. This monopolist does not get the same from each person. For the first person, the U gets the highest willingness to pay (P1). For the second the second highest willingness to pay (P2), and so on. However, for n students, the average revenue is (P1+P2+...Pn)/n. The MR for n students is simply Pn. and these two are not the same.

## Similar Questions

1. ### Microeconomics

It has been estimated that the world demand for wheat can be represented by thefunction P = 80 - 2Q. It has been further found that the countries supplying thismarket have marginal cost curves which when summed together are given by …
2. ### Microeconomics

"In both monopoly and perfect competition the profit maximising output is at the level at which MR = MC, but only in the latter is the optimum output level such that P = MC" Explain the above statement by comparing the model of perfect …
3. ### Microeconomics - determining how many to sel

Hi, I would really appreciate it if someone could help me with these questions: An author earns royalties from his book that are specified as 10% of the book's selling price. The demand curve for this is straight and downward sloping. …
4. ### Economics

How can you obtain a downward sloping market demand curve from a horizontal firm demand curve experiencing perfect competition?
5. ### MICROECONOMICS

Hello ive been struggling with this problem for about 2 days now could someone walk me through it?
6. ### College - Microeconomics - help

Need some help on these questions. Thanks for your help. 9. The models used in economics: a)are usually limited to variables that are directly related. b)are essentially not reliable because they are not testable in the real world. …
7. ### Microeconomics

I am not sure whether these questions are true or false: 1. Surpluses of dairy products that have regulated prices usually occur because the demand is price inelastic. 2. You observe that a linear demand curve shifts to the right, …
8. ### Economics

Price elasticity is unit elastic at the midpoint of a linear, downward-sloping demand curve. a.True b.False
9. ### Microeconomics

For a downward-sloping demand curve, marginal revenue decreases as quantity sold increases. True or False?
10. ### Econ

Please help me and review my answers for my quiz. Let me know which ones you believe to be right and wrong. 1. When P = AR = MR = AC = MC: X economic profits are positive. economic profits are zero. economic profits are negative. normal …

More Similar Questions

Post a New Question