Why is it necessary for a firm that practices price discrimination be a price maker rather than a price taker?
What will be an ideal response?
A price taker has no market power and therefore cannot influence market price. A price maker, on the other hand, is able to influence market price. As long as a seller cannot influence market price, it will not be able to engage in price discrimination.
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The term "price setter" refers to a firm that faces a downward-sloping demand curve and must therefore set the combination of output and price that will maximize the firm's profits
Indicate whether the statement is true or false
Points inside the production possibilities frontier represent inefficient levels of production
a. True b. False Indicate whether the statement is true or false
If the spending multiplier is 3 and the desired amount of increase in real GDP is $270 billion, then by how much would government spending have to increase?
a. $270 billion b. $90 billion c. $30 billion d. $10 billion
Refer to the table below. An output level of 25 units, this firm's accounting profit is ________, and its economic profit is ________. QuantityTotal RevenueExplicit CostsImplicit Costs1050365157563620100937251251258301501619
A. zero; $8 B. $125; $113 C. zero; ?$8 D. $125; zero