Explain why a firm can earn more profit by price discrimination than from setting a uniform price
What will be an ideal response?
First, price discrimination allows a firm to charge a higher price to customers who are willing to pay more than the uniform price. The firm captures more of the consumer surplus. Second, a price-discriminating firm can sell to additional customers who were unwilling to pay the uniform price.
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Use the following figure to answer the next question.
At which point does marginal cost (MC) equal average variable cost (AVC)?
A. Point B B. Point C C. Point D D. Point A
Consider an economy where Y = $3,500 . C = $500 + (0.80Y), and where autonomous investment is equal to $200. a . Is this economy in equilibrium? Explain. b. What will happen if people try to increase their saving to $400
An increase in economic growth at home will increase imports to the United States.
Answer the following statement true (T) or false (F)
The net income of a firm is the firm's
A. total revenue. B. profits. C. retained earnings. D. capital income.