When a firm engages in price discrimination, it sets marginal revenue equal to marginal cost for each separate set of consumers.
Answer the following statement true (T) or false (F)
True
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If a decision is made and it is the best choice for society, the decision is said to be
A) a valid economic choice. B) made in self-interest. C) made in social interest. D) consist with scarcity. E) a want-maximizing choice.
The above figure shows Larry's indifference map and budget lines for ham and pork. Which of the following statements is TRUE?
A) Pork is an inferior good. B) Ham is an inferior good. C) Neither pork nor ham is an inferior good. D) Both ham and pork are inferior goods.
In the above figure, if the firm is producing at Q3 and charging a price of P3, it should
A) increase output and decrease price. B) decrease output and increase price. C) not change output or price. D) shut down.
In general economic environments that correspond to lower levels of planned aggregate expenditure for a given level of Y have PAE curves that are:
A. higher on the expenditure diagram. B. lower on the expenditure diagram. C. at multiple points on the diagram. D. equivalent at point in the diagram.