A firm switching from a single price to a price discrimination
scheme in order to increase total revenue will ________ the
price for the group of consumers with relatively price elastic
demand and ________ the price for the group of consumers
with relatively price inelastic demand.
A. increase; increase
B. increase; decrease
C. decrease; increase
D. decrease; decrease - ANSWER -decrease; increase
In a perfectly competitive market, firms are price ________,
not price ________. - ANSWER -takers; makers
Suppose an all-you-can-eat buffet charges $12 per person,
but allows children under 10 years of age to dine for free.
This pricing scheme is an example of ______-degree price
discrimination. - ANSWER -third
,Suppose Scarlett's Candlestick Lounge is a non-pricing
discriminating monopolist producing candlesticks and is
producing its profit-maximizing level of output. Suppose
further that at her current level of output, Scarlett's average
total cost is $250, her average variable cost is $100, and her
marginal cost of producing an additional candlestick is $250.
In the situation above, Scarletts economic profit is _______
in the short run.
A. greater than zero
B. less than zero
C. equal to zero
D. ambiguous - ANSWER -greater than zero
Suppose Scarlett's Candlestick Lounge is a non-pricing
discriminating monopolist producing candlesticks and is
producing its profit-maximizing level of output. Suppose
further that at her current level of output, Scarlett's average
total cost is $250, her average variable cost is $100, and her
marginal cost of producing an additional candlestick is $250.
, In the situation above, it can be concluded with certainty that
the price of a candlestick is _______ $250.
A. greater than
B. less than
C. equal to
D. less than or equal to - ANSWER -greater than
Suppose a profit-maximizing firm operating in a perfectly
competitive market experience a decrease in fixed costs.
This decrease will cause the firm's profits to ________.
Everything else held constant, the firm will respond to the
cost decrease by _________ the amount it produces in the
short run.
A. remain unchanged; not changing
B. increase; increasing
C. decrease; increasing
D. decrease; decreasing
E. increase; not changing - ANSWER -increase; not changing
Suppose Bob is a wheat farmer, but he also like to give
fiddle lessons. Due to the popularity of his local western
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