Model Hints - Price Discrimination Simulation [Virtual Learning Arcade]

Price Discrimination Model

Overview

The questions ask you to interpret the model output within your answers. In this case, the model output consists of the quality, price, total revenue, total costs and profit for markets that price discriminate compared to markets where there is no price discrimination.

Your discussion should focus on using the simulation to support the theoretical expectations of your discussion. For instance, you could argue that if the price elasticity of demand conditions are different, and the fixed and variable costs are the same, then it is in the firms interest to adopt price discrimination. You can test this expectation using the simulation.

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