Micro Economics Essay Example | Topics and Well Written Essays - 1000 words

Micro Economics - demonstrate ExampleProfit is the difference between the total revenue obtained from sales and the total cost incurred by the firm.In the long- speed the decisions taken would be only exit decisions. Exit decisions are decisions taken by a firm to leave the market. They are not called as Shut-down decisions. Shut-down is only in the short- elapse. Long run equilibrium plays a crucial role in deciding the existence of the firm. In the long run there are enough time periods for the firm to cover its losses and attract normal profits. This is because in the long run, all inputs are variable and the firm stinker have the most profitable train of output i.e. the profit maximization level of output.(B) In the recent years, the business travel market has seen a tremendous change with respect to the airline industry. Changes in demand for leisure travel include to a greater extent short term breaks and more independent holidays where passengers playscript flights, car a nd accommodation by themselves. The reason for the step-down in business class travel is the supply led high business fares which stretched the so called dead business class segment and also he expansion of low cost airlines.2. Price discrimination can be defined as the method of charging different sets for essentially the akin good to different buyers. There are three types of Price discrimination. They are, first, second and third degree discrimination.First-degree discrimination - This is the most original form of discrimination in which each consumer is charged the maximum price he would be unbidden to pay for each individual unit consumed. This kind of discrimination can be noticed in the healthcare industry where doctors charge different fees from different patients.Second-degree price discrimination - This is a more applicatory form of price discrimination. Here firms charge a different price for each set of units sold. unlike prices are charged for different blocks or portions of consumption. This kind of price discrimination is followed in the power and telecommunication industry. The reason behind this is the prices are based on the quantities of output purchased by individual consumers. By doing so, the firms can profit as the quantities used or consumed vary from individual to individual and hence if there is a high consumption by a particular consumer, there is a chance for the firm to earn more profits. Third-degree price discrimination - This is the most common form of price discrimination. Consumers or markets are segmental on the basis of their price elasticity of demand. Often, third-degree price discrimination occurs in the markets that are geographically separated. oppositeness example, books published by American publishers are sold in other countries at a overthrow price than in the U.S. Evidently, buyers in the other countries have greater elasticity of demand that US buyers. At the same time, the high shipping costs makes it unprofitable for firms to buy in foreign countries and resell in the join States.(B) Whenever we travel, is it a train or a flight, it is noticed that adults are charged a different price for the ticket and children are charged a different price. Other similar price discrimination in the same context is that rails some have rail cards entitling them to discounts others do not. It is cheaper for people who book in advance. This