How does economies of scale improve second-degree price discrimination?
A. Firms have increasing opportunity costs and therefore must sell more goods at higher prices to make up the extra costs.
B. ATC decreases and then increases which affects the cost to firms.
C. People have increasing marginal benefit as ATC decreases.
D. ATC decreases as output increases which allows a firm to charge lower prices at different output levels.
Answer: D
You might also like to view...
Refer to Figure 13-13. If the diagram represents a typical firm in the market, what is likely to happen in the long run?
A) Inefficient firms will exit the market and new cost-efficient firms will enter the market. B) New firms will enter the market causing the demand to decrease for existing firms. C) Competition will be intensified as firms strive to make long-run profits. D) Some firms will exit the market causing the demand to increase for firms remaining in the market.
The QWERTY story illustrates: a. the commons problem
b. a negative network externality. c. the path dependence to technology. d. the problem of adverse selection. e. a situation of moral hazard.
Economic bads are items
A. that individuals desire but which receive social disapproval. B. for which the produced quantity is less than the amount desired at a positive price. C. for which the desired quantity is less than what nature provides at a zero price. D. that receive social approval but which governments dislike.
Charter One, Pentagon Federal Credit Union, and Boeing Employees Credit Union are all primarily:
A. commercial banks. B. thrifts. C. insurance companies. D. pension funds.