4. Price Discrimination
!
Make more money
by capturing buyer surplus
!
Very hard to do
!
Keep buyers from buying low and
reselling higher to other customers
5. Riyadh Pizza Company
Saudi Style Supreme
40
Perfect Competition
40
38
36
Keep selling as long as marginal
revenue is more than marginal cost
34
30
32
30
28
26
Price
Marginal Revenue
30
Marginal Cost
29
Profit Per Pizza
30 -29 = 1
20
Total Profit
6x1=6
10
0
Total Revenue
6 x 30 = 180
Ali
Abdullah
Ahmed
Faisal
Mohammed
Mahmood
Sultan
Turki
Cannot charge more than 30 or buyers go to competitor
Total Cost
6 x 29 = 174
Total Profit
180 - 174 = 6
6. Riyadh Pizza Company
Saudi Style Supreme
40
Monopoly with Price Discrimination
40
38
36
Keep selling as long as marginal revenue
is more than marginal cost
34
30
32
30
28
26
Marginal Cost
29
Profit Per Pizza
Varies
20
Total Profit
Add each profit
10
0
Total Revenue
210
Ali
Abdullah
Ahmed
Faisal
Mohammed
Mahmood
Sultan
Turki
Charge different prices to different customers
Total Cost
6 x 29 = 174
Total Profit
210 - 174 = 36
7. Riyadh Pizza Company
Saudi Style Supreme
Price
Perfect
Competition
30
Monopoly
Price
Discrimination
30 - 40
Difference
up to 10
Qty
6
6
6
Total Revenue
180
210
30
Total Cost
174
174
174
6
36
30
Profit
8. Creating Value with the Five Capitals
trust
knowledge
skills
Human
personality
health
relationships
Physical
Cultural
trust
values
institutions
infrastructure
rules
!
Intellectual
ideas
technology
methods
Value Creator
entrepreneur
innovator
team
organization
natural resources
time
buildings
equipment
things than make things
Financial
money and risk
savers - borrowers
time is money
(1+r)n
insurance
limited liability corporations
27. America’s 10 Most Dangerous Jobs
Per 100,000
Average
3.3
Fishing
200
Logging
62
Pilot
57
Farm & Ranch
36
Roofers
35
Ironworkers
30
Sanitation
25
Machinist
19
Truck Driver
18
Construction
18
Source: Bureau of Labor Statistics