What are some obstacles to price discrimination that a monopolist who is protected by high barriers to entry might face?
What will be an ideal response?
The monopolist will not be able to price discriminate if he cannot prevent re-sale of the output from consumers who are offered low prices to consumers who are offered high prices. He also cannot price discriminate if he cannot find a way to segment the market into different types of consumers. In first and third degree price discrimination, this implies that he needs to be able to tell whether a consumer has high or low demand, and under second degree price discrimination, he needs to know the distribution of demands across different consumer types in order to structure price/quantity packages that cause consumers to self-identify as high or low demand consumers.
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The fact that output gaps will not last indefinitely, but will be closed by rising or falling inflation is the economy's:
A. income-expenditure multiplier. B. self-correcting property. C. short-run equilibrium property. D. long-run equilibrium property.
Refer to Figure 10.3. A decrease in the real interest rate, with no other changes that affect aggregate expenditure, is best represented by ________ in panel (a) and ________ in panel (b)
A) a shift from AE3 to AE2; a shift from IS2 to IS1 B) a shift from AE2 to AE3; a shift from IS1 to IS2 C) a shift from AE1 to AE2; a movement from point A to point B D) a shift from AE1 to AE3; a movement from point A to point C
Which statement about oligopoly is false?
A. Prices in oligopoly are predicted to fluctuate widely and frequently. B. One firm's behavior is a function of what its rivals do. C. Oligopolistic firms recognize their interdependence. D. A few firms play an important role in the sale of a product.
When the coupon rate on newly issued bonds ________ relative to older, outstanding bonds, the market price of the older bond ________
A) increases; falls in the secondary market B) increases; rises in the secondary market C) decreases; falls in the secondary market D) decreases; falls in the primary market