Third-Degree Price Discrimination Occurs When a Monopoly

question 11

Multiple Choice

Third-degree price discrimination occurs when a monopoly

• A) separates its customers into distinct markets,charging a different price to each group.
• B) charges different prices for the same good sold to the same customer.
• C) requires the consumer to pay a separate fee simply for the right to purchase the good.
• D) charges each customer the maximum that he is willing to pay for each item purchased.

---

Definitions:

Gross Investment

The total amount of money spent on capital goods over a specific time period without accounting for depreciation.

Disposable Income

Income that is available to households after paying taxes and receiving government transfers, used for spending or saving.

C

In the context of economic models, often stands for Consumption, which is a component of the GDP formula representing total spending by consumers on goods and services.

Gross Investment

The total amount spent on purchases of new capital assets and replacement of depreciated assets, not adjusted for depreciation.