Market structure and pricing strategies: A mathematical and graphical analysis of price discrimination, accompanied by a Microsoft Excel–based tool

Abstract

The author focused on solving problems of third-degree price discrimination under a monopoly by integrating microeconomic theory and spreadsheet modeling. Price discrimination refers to a firm situation in which the same good is sold to different groups of consumers at different prices. First, the author included an introductory math background and graphical features of this type of problems. Next, he introduced a practical exercise and his own programing to solve it using Microsoft Excel. The tutorial will allow students a better understanding of the link between theory and problem solving in microeconomics.