To practice third-degree price discrimination, each of these market conditions must be met except which one?
A) The firm must have market power.
B) No arbitrage opportunities can exist between customer groups.
C) Different groups of customers with equal own price elasticities of demand must exist.
D) Different groups of customers with different own price elasticities of demand must exist.
C) Different groups of customers with equal own price elasticities of demand must exist.
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If you are willing to purchase a house for $300,000 and you purchase the house for $275,000 . this transaction will generate:
a. There is no surplus created b. $25,000 worth of seller surplus and unknown amount of buyer surplus c. $10,000 worth of buyer surplus and $15,000 of seller surplus d. $25,000 worth of buyer surplus and unknown amount of seller surplus
According to the purchasing power parity, if the price level in the US rises relative to Mexico
a. The dollar will appreciate relative to the peso b. The dollar will depreciate relative to the peso c. There is no effect on either currency d. None of the above
If a firm experiences economies of scale throughout, it will have a horizontal long-run average-total-cost curve
a. True b. False Indicate whether the statement is true or false
Historically, the change in real GDP during recessions has been
a. mostly a change in investment spending. b. mostly a change in consumption spending. c. about equally divided between consumption and investment spending. d. sometimes mostly a change in consumption and sometimes mostly a change in investment.