Why is it important that a firm have market power if it wishes to engage in price discrimination?
What will be an ideal response?
If a firm does not have market power then it will face price competition from other firms in the industry if it tries to increase the price to one group of consumers. The competitors will charge a lower price to this group of consumers and the first firm will end up serving only the low price consumers. This will make it unprofitable to engage in price discrimination.
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Suppose two countries use different combinations of inputs, such as labor and capital, to produce the same product. This implies all of the following except that
A) one country is more efficient in the production of the good than the other. B) the inputs are not equally productive in the two countries. C) the prices of the inputs are not the same in the countries. D) the two countries use different technologies to produce the product.
Monetary policy can be most accurately described as
a. the use of government taxation and expenditures to achieve macroeconomic goals. b. the use of the government's regulatory powers to improve economic efficiency. c. the government provision of goods to improve economic efficiency. d. the deliberate control of the money supply to achieve macroeconomic goals.
Mallard Corporation had a price-earnings ratio of 15, paid a dividend of $3, and retained earnings of $1 a share. What was the price of a share of Mallard stock?
a. $15 b. $30 c. $45 d. $60.
What is the domestic price of a TV in a closed economy?
A. $75 B. $137.50 C. $100 D. $125