Industrial organisation pt2

There are two markets for water which are home and business customers. Should we set the same price for both markets? What is efficient? Common pricing where the price is the same in both markets is worse then price discrimination where different prices are charged. The answer lies in allowing a small amount of price discrimination. It is efficient to charge different prices for different markets because it gets more consumers to participate in lightening their wallets, like student and business travellers on trains where students will pay only a small amount for a ticket compared to business customers while if the price is too high for students then they will not buy a ticket so more revenue is generated because there are more consumers and so firms get more profits. Too much regulation derives monopolies of any incentive to improve the quality of water and the water pumps and so regulation where monopolies profits are zero is bad because there is no incentive to make profits. Regulation has all sorts of problems. Firms do not have incentives to lie because of foresight. Regulators make TV companies provide a certain level of quality of programming. Bunch of equations and graphs in lecture that were not easy to understand and the lecturer got confused and made a mistake in the maths. Price discrimination is enforced by rail cards in the rail industry because young persons rail cards are different to old persons rail cards.
A little bit of price discrimination is a good thing. Monopolists can offer bundling and versioning where by with Microsoft office software packages it is better value for money for consumers to buy a bundle of software instead of buying the software separately.