The case where a firm sells each unit at the maximum amount each customer is willing to pay for it is called A) first-degree price discrimination. B) second-degree price discrimination. C) third-degree price discrimination. D) nonlinear price discrimination. ANSWER A
Date: September 9th, 2020
Mouthwash is sold in 24 oz bottles for $2.40 and in 12 oz. bottles for $1.20. This represents A) price differentiation. B) price discrimination. C) marginal cost pricing. D) None of the above. ANSWER D
Date: September 9th, 2020
A cheese-by-mail club that charges an annual membership fee and an additional fee per cheese shipment utilizes A) perfect price discrimination B) third-degree price discrimination. C) two-part pricing. D) uniform pricing. ANSWER C
Date: September 9th, 2020
If two markets have the same price elasticity of demand at every price, a monopoly will not practice multimarket price discrimination. What will be an ideal response? ANSWER True. If both markets have the same price elasticity of demand, there is nothing to be gained by price discrimination.
Date: September 9th, 2020
A good example of perfect price discrimination is A) selling concert tickets to individuals on the street corner. B) buying concert tickets at the ticket window. C) selling concert tickets at the ticket window. D) buying a concert ticket on the street corner. ANSWER A
Date: September 9th, 2020
A perfect price discriminator A) charges each buyer her reservation price. B) charges different prices to each customer based upon different costs of delivery. C) generates a deadweight loss to society. D) charges lower prices to customers who buy greater quantities. ANSWER A
Date: September 9th, 2020
Price discrimination is welfare reducing. A) False, price discrimination can increase the coverage of a market thereby increasing welfare. B) False, price discrimination limits the coverage of a market thereby increasing welfare. C) True, price discrimination limits the coverage of a market thereby increasing welfare. D) True, price discrimination can increase the coverage of a […]
Date: September 9th, 2020
If a firm faces a flat demand curve, A) it cannot engage in price discrimination. B) it can only engage in two-part tariffs. C) it can only engage in perfect price discrimination. D) None of the above. ANSWER A
Date: September 9th, 2020
Firms price discriminate to maximize total revenue. Indicate whether the statement is true or false ANSWER False. Firms price discriminate to increases profit.
Date: September 9th, 2020
A perfect-price-discriminating equilibrium maximizes A) consumer surplus. B) the associated deadweight loss. C) the market inefficiency. D) total welfare. ANSWER D
Date: September 9th, 2020
