The Possibility of Arbitrage by Its Customers Is Loathed by the Price

question 43

Multiple Choice

The possibility of arbitrage by its customers is loathed by the price discriminating monopolist because:

• A)customers enrich themselves at the expense of the monopolist's profits.
• B)it is the customers that price discriminate in this case.
• C)profits will be lower even though separation of markets. is preserved.
• D)it encourages entry.

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Definitions:

FICA Taxes

FICA Taxes are payroll taxes collected to fund the Social Security and Medicare programs, split between the employer and the employee.

Payroll Tax Expense

The taxes that employers are required to withhold and pay on behalf of their employees, including Social Security and Medicare taxes.

State Unemployment Taxes

Taxes paid by employers to the state to fund unemployment insurance programs for workers who have lost their jobs.

Federal Unemployment Taxes

Taxes imposed by the federal government on employers to fund unemployment benefits for workers who have lost their jobs.