Me during my exam today: "However, this could be *really* dodgy and bring firms under scrutiny from CMA..... really dodgy stuff.." Seriously though thank you for this vid dal :)
@@signalhd9793 funnily enough, somebody just replied to a 3 year old comment of mine and I’m only 18 now, so i was 15 then and it feels like so long ago, it’s such a weird feeling. In a good way ig. I kinda hope u can feel that too. Heheh 🤭 Also congrats on graduating. This eco makes me feel like imma fail, how could I possibly choose eco in university? Tho I’d really love to.
Dal😑 you! you my man are just. ey. I have no words for you. the way you explained 2nd Degree😐 ... *sigh😑... mxiii... i just don't have words for you. idk where you are but i hope a brick of gold just drops on you man! damn. you've been saving my behind since i was in highschool 4 years ago😭😭 and I'm about to write my final exams in uni and here you are at it again😩 God bless you heavily Dal. seriously..
Your videos are amazing! Can you make a video on "The theory of second best" including the graph (with two DWL) and comparing naive economists vs sophisticated economists when intervening in a market where there is uncorrectable market failure. It would be amazing to know for some A* evaluation points in the exam
thank you very much for the video sir. However, i have an important question. For 1st degree discrimination wouldn't there be allocative efficiency because technically price will always = Mc and since AR and MR will be equal for first discrimination, thereby so will the allocative efficiency
yes, indeed, first-degree price discrimination is the very efficiency just like he said, all the consumer surplus turned into monopoly profit. However, it is not realistic in the real world that the firm can know every consumer's willingness price to pay. hope that explanation will help you
For 2nd-degree price discrimination,is that lower price only for the good sol between q1 and q cap ,this would make sense why the consumer surplus is that small triangle.
I was looking for a question on why it wasn't the trapezium but I'm sure what you're saying is right and that the surplus is only between Q1 and Qcap as that is the quantity sold, not below Q1
I have a question.. For an airline, for example, is economy class and business/first class considered an identical service? I mean yeah, they both fly you to your destination but first/business class will have features and amenities that economy class doesn't, so are they considered the same or different services? So with airlines charging customers different prices for each, it it a form of price discrimination? Thanks!
But price discrimination assumes the products are the same and the costs are the same. The cost of running business class is higher than running economy, so its not price discrimination
There's allocative efficiency when there's 1st-degree discrimination. And saying that the "allocative inefficiency" outways the "pros" of price discriminating monopolies is biased. One could argue that the producer having all the surplus is as 'wrong' as the consumer having it. What's wrong with paying the price equivalent to what you value the good or service?
It's always allocative inefficiency when there's 1st-degree discrimination. Consumers are losing their surplus to the monopoly, and the price charged isn't the welfare-maximizing point anymore (MC=AR/the market price). There's no biasedness, it's just facts.
Hi Dal, Quick question. Let's say you want to purchase a membership to a gym .Would it be second degree price discrimination if the annual membership is cheaper ( per month ) than the monthly membership on its own ?
That’s racist. You’re benefitting off these free lessons online, you should be grateful for the material taught by those guys in their non native language (aka English so people like you can learn from them)
Oh no...you're getting it wrong. I respect these guys for sharing freely what they know. And btw I'm an Indian myself...i have my own accent and so I'm just joking!
Good evaluation: - Hwer technoloy develpomewnts ie the use of apllciaitons such as midrosodft teams alliwng for peopel iebusinesmen.woman to talk to otyher people- and thuis takingt last. mionutye flights between Dubaio to London for instnac ehas signifcantly reduc3d price discrnminqtioin for those with inelastic demand. Thias is becuse they no longe have to phsucally flyfrom a-b and can thereofre not have to oay a different pricve, to different consumers for the aamne g/s with no differneces to the cowts of production ????
In 2nd Degree PD - why does the MC curve go vertical at Max Capacity? what is the meaning of that vertical supply curve? Why not end it at horizontal line?
the firm has limited capacity and the vertical line shows where the supply ends. for instance, a cinema having a certain number of seats for a movie. therefore, we use a vertical line to show the maximum capacity and where firms should aim to maximise revenue in the last minute.
This is late as hell, but for anyone who finds this: MC is parallel to the X axis in 2nd degree discrimination due to the fixed supply offered by firms such as airliner seats which they can't supply anymore of
