What arguments have been advanced in defense of price discrimination?
Some would support price discrimination on the basis of fairness or justice. For example, lower prices might be favored for the elderly or the needy. In some cases, the price discrimination allows a firm to stay in business and provide desirable products to consumers. This may be done by attracting additional consumers with the discriminatory prices, thus, generating sufficient revenue to cover costs. In some of these cases, the discriminatory pricing may allow the firm's output to expand so that it reaps economies of scale, thus potentially driving the price down for all consumers.
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To maximize utility, why does a consumer consume the combination of goods that equates marginal utility per dollar on the different goods rather than just equating the marginal utility of the different goods?
What will be an ideal response?
The average productivity of capital is defined as the ratio of total capital employed to the total output produced
a. the extra output produced by employing one more unit of capital while holding other inputs constant. b. the extra output produced by employing one more unit of capital while allowing other inputs to vary. c. the ratio of total output produced to the quantity of capital employed. d.
Unequal pay that is caused by economic discrimination will be due to
A. a noneconomic factor. B. difference in human capital. C. differences in the marginal revenue product. D. a monopolistic labor market.
Hermione is considering an investment that has a ¾ chance of paying a 10 percent rate of return and a ¼ chance of paying 2 percent. What is the average expected rate of return on the investment?
A. 2 percent. B. 6 percent. C. 8 percent. D. 10 percent.