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PRICE DISCRIMINATION: Charging different prices to different buyers for the same good. This is an age old practice for suppliers who have achieved some degree of market control, especially those with a monopoly. The reason for price discrimination, of course, is higher profit. To be a successful price discriminator you must be able to do three things--(1) have market control and be a price maker, (2) identify two or more groups that are willing to pay different prices, and (3) keep the buyers in one group from reselling the good to another group. In this way, you will be able to charge each group what they, and they alone, are willing to pay.
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Lesson 13: Aggregate Demand | Unit 1: The Concept
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In this lesson we take a look at the demand side of the aggregate market (AD/AS analysis)--aggregate demand. A definition: Aggregate Demand is the aggregate or total expenditure on final goods and services produced in the domestic economy, at a range of price levels, during a given time period (usually a year). Three points: - Expenditures are made by all members of society.
- Expenditures are made during the year.
- Expenditures are on the production that people use to satisfy wants and needs.
Aggregate demand is only one side of the aggregate market--the expenditure side--the other side is aggregate supply--the producing side.- Expenditures come from the household, business, government, and foreign sectors.
- Production comes from resources--labor, capital, land, and entrepreneurship.
- The aggregate market is a model used to analyze the economy's total production and the price level.
- This analysis, also called AD/AS, lets us understand macroeconomic events, like recessions, inflation, and unemployment.
- The aggregate market can be used to evaluate the effects of government policies.
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PERFECTLY ELASTIC An elasticity alternative in which infinitesimally small changes in one variable (usually price) cause infinitely large changes in another variable (usually quantity). Quantity is infinitely responsive to price. Any change in price, no matter how small, triggers an infinite change in quantity. This characterization of elasticity is most important for the price elasticity of demand and the price elasticity of supply. Perfectly elastic is one of five elasticity alternatives. The other four are perfectly inelastic, relatively elastic, relatively inelastic, and unit elastic.
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GREEN LOGIGUIN
[What's This?]
Today, you are likely to spend a great deal of time surfing the Internet wanting to buy either a how-to book on building remote controlled airplanes or an extra large beach blanket. Be on the lookout for slow moving vehicles with darkened windows.
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A U.S. dime has 118 groves around its edge, one fewer than a U.S. quarter.
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"Inside the ring or out, ain't nothing wrong with going down. It's staying down that's wrong. " -- Muhammad Ali
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TSE
Toronto Stock Exchange
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