Monopolies that price discriminate do so because
A) they are able to do so and no one else can.
B) they can increase their profits.
C) it keeps them out of trouble with the government.
D) it is more efficient.
Answer: B
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Using Figure 2 above, suppose that the economy started at PAE2. A potential change that could cause the economy to go from PAE2 to PAE3 might be:
A. exports decrease. B. consumption spending increases. C. investment decreases. D. imports increase.
Asymmetric information in financial markets is a potential problem usually resulting from:
A. lenders having more information than borrowers. B. the fact that people are basically dishonest. C. the uncertainty about Federal Reserve monetary policy. D. borrowers having more information than the lenders.
Inflation tends to:
A. Increase productivity B. Decrease input prices C. Increase the strength of the multiplier D. Reduce the strength of the multiplier
For which situation would we expect the adjustment speed to be the fastest?
A) The demand for surgeons increases. B) A large increase in birth rates leads to an increase in elementary school teachers. C) The demand for movie videos increases. D) The demand for office space in downtown Chicago increases.