One example of price discrimination occurs in the publishing industry when a publisher initially releases an expensive hardcover edition of a popular novel and later releases a cheaper paperback edition. Use this example to demonstrate the benefits and potential pitfalls of a price discrimination pricing strategy
The answer should address the three basic lessons of price discrimination. First, price discrimination is a rational strategy that can lead to higher monopoly profits. Second, price discrimination requires an ability to separate customers according to their willingness to pay. Third, price discrimination can raise economic welfare.
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Minimum-wage laws benefit society by creating a surplus of labor
a. True b. False Indicate whether the statement is true or false
Among economic models, the circular-flow diagram is unusual in that it
a. drastically simplifies the real world. b. features more than one type of market. c. features flows of dollars. d. does not involve mathematics.
Refer to the data. The 10 percent proportional tax on income would cause:
Answer the question on the basis of the following before-tax consumption
schedule for an economy:
A. both consumption and saving to increase by larger and larger absolute amounts as GDP
rises.
B. both consumption and saving to increase by smaller and smaller absolute amounts as GDP rises.
C. consumption to decrease by larger amounts and saving to decrease by smaller amounts
as GDP rises.
D. no change in the amounts consumed and saved at each level of GDP.
In the classical model, desired saving
A) is inversely related to real income. B) exceeds investment. C) is equal to desired investment. D) is less than desired investment.