Price Discrimination,if Possible,allows a Price-Setting Firm to Increase Its Profits

question 34

Multiple Choice

Price discrimination,if possible,allows a price-setting firm to increase its profits by

• A)shifting its cost curves downward.
• B)raising the price above the competitive price.
• C)charging different prices according to the willingness to pay of each consumer.
• D)reducing costs through a reduction in output.
• E)charging different prices according to the different marginal cost on each unit.

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Definitions:

CPI

The Consumer Price Index serves as a measurement tool that quantifies the average cost of a selected range of consumer goods and services, taking into account food, transportation, and healthcare, through weighted average prices.

Disinflation

A decrease in the rate of inflation, resulting in a slow down in the rate at which prices are rising.

Deflation

is the decrease in the general price level of goods and services, often signifying an economic contraction.

CPI

A tool for examining the average prices consumers pay for a mix of services and goods, such as healthcare, transportation, and food, the Consumer Price Index calculates this using a weighted average approach.