What is the difference between a uniform price and a nonuniform (nonlinear) price? Give an example…

1. What is the difference between a uniform price and a nonuniform (nonlinear) price? Give an example of a nonlinear price.

2. Suppose a company is currently charging a uniform price for its two products, creamy and crunchy peanut butter. Will third-degree price discrimination necessarily improve its profit? Would the firm ever be worse off with price discrimination?

3. How might screening help a firm price discriminate? Give an example of screening and explain how it works. 

 

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