price discrimination

[pbansal]

the theory of price discrimination predicts that in comparison to single price monopoly
1-y will increse and AR will increse
2- y will increse and AR WILL DECREASE
3-Y WILL DECREASE AND AR WILL DECREASE
4-Y WILL DECREASE. AND AR WILL INCREASE

[Sumit]

I think its....1).y will increase and AR will increase....
If we take particularly 1st,2nd, 3rd n intertemporal price discrimination..you will see in all the cases firm increase y but charge different price for different output..n due to which AR increases...but I not sure about AR....coz if after increase in y & when monopolist charging different price for y for different consumer(that is monopolist now discriminating) ...If % change in TR is greater than the % change in total output (In contrast with single price monopoly case where TR n Y will be fixed.) the AR will increase but if % change in TR is less than % change in y...then AR will decrease..but I inclined toward option.a) more due to reason coz a rational firm will now choose the output which will maximize his AR...coz firm is aware of the fact that his decision of increasing output...in turn increase its cost.... So, a Rational firm will choose his output which increase its profit than the case when he is producing under single price monopoly...