Suppose the Market for Some Product Can Be Divided into Two

question 29

Multiple Choice

Suppose the market for some product can be divided into two segments,each with a linear demand curve.A monopolist can set a different price (but only one price) in each segment.The profit-maximizing price discrimination across these two market segments will lead to

• A)higher output with average revenue higher than the best single price.
• B)lower output with total revenue higher than the single best price.
• C)lower output with a higher average revenue than the best single price.
• D)higher output with average revenue lower than the best single price.
• E)the same output but higher average revenue than the best single price.

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Definitions:

Labor Standards

Regulations concerning the rights and welfare of workers, including minimum wage, working hours, safety, and health protections, and non-discrimination practices.

NAFTA

The North American Free Trade Agreement, a treaty between Canada, Mexico, and the United States that eliminated most tariffs and trade barriers between the countries, in effect from 1994 to 2020.

Labor Cooperation

The collaboration between workers, unions, and sometimes employers to achieve common goals, such as improving working conditions or productivity.

Social Dumping

The practice of companies moving production to countries with lower labor standards or costs, often leading to job loss and reduced labor conditions in the originating country.