A monopolist engages in price discrimination
A. by charging a lower price when marginal cost is higher.
B. by charging a higher price to consumers whose demand is more inelastic.
C. by charging a lower price to consumers whose demand is more inelastic.
D. by charging the same price to all consumers.
Answer: B
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If a firm is producing at an output level such that the MR is $550 and the MC is $780,
a. the firm incurs a total loss of $230 b. the firm should contract production because marginal profit is less than zero c. M? is +$230 d. the firm should expand its output level because its total revenue is rising by $550
When a per-unit tax is levied on a goods market in which supply is not perfectly inelastic but such a tax nevertheless does not give rise to any deadweight loss, consumers are made no worse off by the imposition of the tax.
Answer the following statement true (T) or false (F)
Suppose Sam buys a good for $100 at a yard sale. If consumer surplus from the sale is $75, Sam would have been willing to pay:
a. $100 b. $175. c. $25 d. equal to the deadweight loss.
Stagflation is the combination of
a. falling output and a falling price level b. falling output and rising unemployment c. falling output and a rising price level d. falling output and falling unemployment e. rising unemployment and a falling price level