33. Second Degree Price Discrimination

In this video, I use graphical intuition to describe the optimal second degree price discrimination pricing of a monopolist.

For a list of videos and links to these videos (organized by topic), check out the Intromediate Microeconomics video web page:

http://blog.thisyoungeconomist.com/p/learn-microeconomics.html

Category:

Education

Tags:

• price discrimination
• monopoly
• microeconomics
• economics lectures
• economics videos
• graphical economics
• intromediate microeconomics
• intermediate microeconomics
• optimal pricing
• two-part tariffs

[intromediateecon]

@mrmarygoing For simplicity, MC is zero. I say this in a popup comment at 0:28.

The monopolist here is making "all or nothing" offers to prospective consumers. It charges a price equal to the area under the demand curve up to the quantity offered. Consumers cannot buy more or less of the good.

The trick is sorting the consumers by offering them different combinations of prices and take-it-or-leave it quantities. These pairings of price and quantity are what I refer to as "packages."

[ebpatra21]

very good presentation. i only want to make one note, that the distance for q2 ' until red demand curve should be equal to the distance from red demand curve until black demand curve. becasuse these distances represent MC and MB respectively.

[StitchBeatbox]

you really have the clearest tutorials on youtube for micro! subscribed!

[Julymaple]

very good and very helpfull~ thanks a lot~



[mrmarygoing]

Pb, Pb1, Package A, Package B... you lost me. What are the prices? Where is MC?