tie in sale 可唔可以extract consumer surplus??

我見past papers (mc 時)一時話可以, (long Q答案)一時又話唔可以,

咁究竟可唔可以??

2 Answers

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  • K
    Lv 7
    1 decade ago
    Favorite Answer

    answer seems to be YES:

    The maximum that a consumer is willing to pay for an additional unit of a good is the definition of the consumer's marginal use value.

    The consumer is choosing the quantity demanded of the good at a given market price P.

    At a quantity where MUV > P, the consumer is not paying the maximum he is willing to pay for the last unit. The consumer can further increase his gain (i.e. consumer surplus) by purchasing an additional unit of the good.

    At the quantity where MUV = P, his gain (i.e. consumer surplus) cannot be further increased with the purchase of another unit of the good. His consumer surplus is maximized at that quantity. Hence, to purchase a quantity until MUV= P is a result of the consumer maximizing gain (consumer surplus).

    It is possible that the consumer has to pay a maximum average price when he is given an all-or-nothing contract with fixed quantity. The consumer can only choose to accept or reject the offer; he cannot choose the quantity.

    Under an all-or-nothing offer, the seller might be able to extract the consumer's entire total use value of the good.

    Common mistakes:

    MUV and P are the same thing.

    Ignore maximization by the consumer.

    Don't know that it is the optional choice of quantity demanded by the consumer that brings MUP to equal P.

    http://www.beacon.com.hk/banner/06_joechan/06paper...

    H. Tie-in Sale

    1. A tie-in sale is an offer to sell a good at a given price on condition that the buyer also buys another good at a stated price.

    2. It aims to extract the consumer surplus from buyers. It uses the tied item (e.g. film) as a means to collect more of the consumer’s TUV of the tying item (e.g. the instant photo camera).

    Suppose a firm sells a product (e.g. Polaroid instant photo camera), the use of which requires the consumption of a secondary product (Polaroid film). The consumer who buys the first product is also required to buy the second product from the same company.

    forum.hebron.edu.hk/test/2.doc

    2007-11-09 11:14:43 補充:

    you are welcome

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