How should a seller allocate output across customer groups when resale is blocked?
Allocate so each market’s MR equals common MC, then price from that market’s demand.
Follow the cause and effect
Write separate demand and MR for each group.
Set MR1=MR2=MC to find each Qi.
Substitute Qi into demand and check that the less elastic group pays more.
The model you are using
Conditions for this model
Two identifiable segments, no resale, constant MC and no extra segmentation fixed cost.
The exam trap
Different prices do not prove discrimination when service costs differ, and resale can undo price gaps.
Connect the reasoning to the graph
What changes
- Two market panels have separate MR curves linked by one MC; total output is the sum of Qi.
What stays fixed
Two identifiable segments, no resale, constant MC and no extra segmentation fixed cost.
Keep these conditions throughout the comparison; change only what the case above specifies.
What to inspect
Substitute Qi into demand and check that the less elastic group pays more.
Compare before and after, and locate the conclusion on the graph.
5 MINUTES · TRANSFER THE IDEA
Can you explain it without the lesson?
Explain why the more elastic group usually receives a lower price when MC is common.