All exercises are available on MyEconLab; * = answer* = answer at the back of this book; M = mathematicalM = mathematical problem.
1.1 As of 2015, the pharmaceutical companies Abbott Laboratories, AstraZeneca, Aventis Pharmaceuticals, Bristol-Myers Squibb Company, Eli Lilly, GlaxoSmithKline, Janssen, Johnson & Johnson, Novartis, Ortho-McNeil, and Pfizer provide low-income, elderly people with discounts on many prescription medicines. Why would these firms do that?
1.2 Alexx’s monopoly currently sells its product at a single price. What are the necessary conditions so that he can profitably price discriminate?
*1.3 Spenser’s Superior Stoves advertises a ...