Which of the Following Statements Is True of Price Discrimination

question 88

Multiple Choice

Which of the following statements is true of price discrimination?

• A) Successful price discrimination will provide the firm with lower total profits than if it did not discriminate.
• B) Successful price discrimination will provide the firm with more profit than if it did not discriminate.
• C) Successful price discrimination will generally result in a lower level of output than would be the case under a single-price monopoly.
• D) Successful price discrimination occurs when there are differences in the costs of producing for different groups of buyers.

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Definitions:

Output Increases

A situation where the production capacity of an economy grows, leading to more goods and services being available.

Productivity Rises

An increase in the efficiency of production, often leading to more output with the same or fewer inputs.

Relative Prices

The price of a commodity or service in comparison to another, indicating its opportunity cost and economic choice.

Substitutable Resources

Resources that can replace each other in production or consumption, leading to flexibility and alternatives for consumers and producers.