13) 13) Price discrimination A) is a form of pricing where consumers pay differe

Question

13) 13) Price discrimination A) is a form of pricing where consumers pay different prices for a good B) is when consumers use prices to discriminate between different quality products C) allows firms to set a single intermediate price between consumers' low and high willingness to pay D) is illegal in the U.S 14) At many municipal golf courses, local residents pay a lower fee to play than other golfers do. One 14) golf course to be able to successfully price discriminate according to necessary condition for the residency is that A) they require all golfers to rent a cart B) there are many golf courses nearby from which golfers can choose. C) local resident golfers and other golfers have the same price elasticity of demand to play at the municipal course. D) they can check the identification cards of golfers 15) A perfect price discriminating equilibrium maximizes A) the associated deadweight loss C) the market inefficiency B) consumer surplus. D) total welfare. 16) Marginal Revenue is 16) A) the increase in total revenue from selling one more unit of output B) equal to P(1+1/e) C) equal to P when the price elasticity of demand is infinite. D) All of the above 17) If a firm is a price taker, then its marginal revenue will always equal B) price. 17) A) total cost C) one. D) zero. 18) A profit maximizing firm selects output such that 18) A) average profit is maximized C) marginal profit is maximized. B) total profit is maximized. D) Both A and B 19) An electricity provider charges consumers $0.20 per kWh for the first 100 kWh, $0.25 per kWh for the next 50 kWh, and $0.27 per kWh for all subsequent kWH of usage. This would be considered 19) B) bad business practices D) an example of three-part pricing. C) an antitrust violation. 20) Assuming a horizontal long-run market supply curve, which of the following statements is (are) TRUE about competitive firms in the long run? A) p MC C) profit 0 B)p=AC D) All of the above. 21) When firms price discriminate they tum into 21) A) producer surplus, consumer surplus C) total cost, profit B) consumer surplus, profit D) producer surplus, revenue

Explanation / Answer

13> A

Price discrimination is a pricing strategy that charges customers different prices for the same product or service.

14> D

They have information to differentiate between customers, thus they charge differently.

15> D

All the welfare is turned into producer surplus, thus no welfare is lost.

16> D

MR is the marginal revenue which is the increase in revenue due to an increase in the output.

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