What is perfect price discrimination? Is perfect price discrimination efficient? Why or why not?
What will be an ideal response?
Perfect price discrimination occurs if a firm is able to sell each unit of output for the highest price anyone is willing to pay for it. With perfect price discrimination, output increases to the point at which price, and hence marginal benefit, equals marginal cost. So perfect price discrimination achieves efficiency.
You might also like to view...
Let "C = Ca + by" define the consumption function. The term "by" is
A) the marginal propensity to consume. B) autonomous consumption. C) current income. D) consumption that depends on income.
In the above figure, the total cost curve is curve
A) A. B) B. C) C. D) none of the curves in the figure.
In the figure above, if the government provides the efficient amount of education, what is the tuition?
A) $10,000 per year B) $14,000 per year C) $8,000 per year D) $6,000 per year
When the consumer spends a large portion of her income on a good, demand will be
A) elastic. B) unit-elastic. C) inelastic. D) elastic, unit-elastic or inelastic depending upon supply.