This Figure Reflects the Market for Outdoor Concerts in a Public

question 517

Multiple Choice

This figure reflects the market for outdoor concerts in a public park surrounded by residential neighborhoods.
Figure 10-3
-Refer to Figure 10-3. The social cost curve is above the supply curve because

• A)it takes into account the external costs imposed on society by the concert.
• B)it takes into account the effect of local noise restrictions on concerts in parks surrounded by residential neighborhoods.
• C)concert tickets are likely to cost more than the concert actually costs the organizers.
• D)residents in the surrounding neighborhoods get to listen to the concert for free.

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Definitions:

Perfect Price Discrimination

Perfect price discrimination occurs when a seller charges each buyer their maximum willingness to pay, extracting all consumer surplus.

Total Profits

The sum of earnings from a business operation, after all expenses have been deducted from total revenue.

Price-discriminating Monopolist

A monopolist that charges different prices to different consumers or groups of consumers for the same product, not based on cost differences.

Market

Any structure that allows buyers and sellers to exchange any type of goods, services, and information.