Price discrimination is based on self-selection:
A. when a firm can distinguish consumers with a high versus low willingness to pay.
B. when a firm offers a menu of alternatives, designed so that different customers will make different choices based on their willingness to pay.
C. when a monopolist knows perfectly the customer's willingness to pay for each unit its sells and can charge a different price for each unit.
D. when monopolists decide for themselves whether to engage in price discrimination.
B. when a firm offers a menu of alternatives, designed so that different customers will make different choices based on their willingness to pay.
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Which of the following is considered to be a cost of information?
a. The price of the commodity for which information is collected. b. The time spent to collect the information. c. The difference in price charged by different sellers for the same commodity. d. The difference in price paid by different buyers for the same commodity.
If the economy is operating along its long-run aggregate supply curve and aggregate demand increases, which of the following situations will occur?
a. Potential output will increase but the price level will remain constant b. Both potential output and the price level will increase c. Potential output will remain constant and the price level will increase d. Both potential output and the price level will decrease
An investment pays $1,500 half of the time and $500 half of the time. Its expected value and variance respectively are:
A. $2,000; (250,000 dollars)2 B. $1,000; 250,000 dollars C. $1,000; 250,000 dollars2 D. $1,000; 500,000 dollars
Which of the following is the reason why pharmaceutical firms are NOT monopolistically competitive?
A. Pharmaceutical firms sell differentiated products. B. There are many buyers in the market. C. There are many sellers in the market. D. There are barriers to entry in the market, like patents.