Price discrimination strategy also cartel behaviour of coal industry
1. A television newscaster said, "Janet Jones is $20 million richer today. She just won the Florida lottery, which will pay her $1 million per yr for every of the next twenty yrs." Is she really $20 million richer?
2. Some time ago, most of the major airlines issued student travel cards at a nominal price. These cards permitted college students to fly "space available" (which is, no reservations allowed) at substantial discounts. Whenever this practice was in effect, some older non students were using the cards also some students were insuring themselves available space by reserving seats for fictitious passengers who then do not describe how up for the flight.
(a) Did the discount represent price discrimination?
(b) Did the conditions necessary for successful price discrimination exist?
3. Suppose which the soft coal industry is a competitive industry also it is in long run equilibrium. Now suppose which the industries in the industry form a cartel.
(a) Illustrate what will happen to the equilibrium output also price of coal also elucidate why?
(b) After the cartel is operating, are there incentives for the individual industries to cheat? Elucidate why?
(c) Does the possibility of entry by all the industries make a difference in the behaviour of the cartel?