If a Monopolist Engages in Price Discrimination, It Will

question 3

Multiple Choice

If a monopolist engages in price discrimination, it will

• A) realize a smaller profit.
• B) charge a higher price where individual demand is inelastic and a lower price where individual demand is elastic.
• C) produce a smaller output than when it did not discriminate.
• D) charge a competitive price to all its customers.

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Definitions:

Nominal GDP

Current price-based valuation of every final good and service produced within a nation's boundaries in a set timeframe.

Real GDP

Real Gross Domestic Product (GDP) measures the value of all finished goods and services produced within a country's borders, adjusted for inflation, within a specific time period.

Price Level

The averaged-out price for the total spectrum of goods and services in the economy.

Nominal Wage

The wage paid to workers stated in current money terms, without adjustment for inflation.