A Monopoly Can Practise Price Discrimination When It

question 90

Multiple Choice

A monopoly can practise price discrimination when it

• A)can segment the market according to the different prices the consumers are willing to pay.
• B)is a price taker.
• C)has different marginal costs of production for different output levels.
• D)has decreasing average variables cost.
• E)produces a good with close substitutes.

---

Definitions:

Direct Manufacturing Cost

Expenses directly associated with the production of goods, including direct materials and direct labor costs.

Indirect Manufacturing Cost

Costs related to production that are not directly tied to a specific product, such as maintenance, supervision, and utilities.

Incremental Manufacturing Cost

The additional cost incurred for the manufacturing of one more unit of a product.

Relevant Range

The range of activity within which the assumptions about variable and fixed costs remain valid, used in cost accounting and financial planning.