Reference: Ref 14-3 (Figure: PPD) Refer to the Figure

question 80

Multiple Choice

Reference: Ref 14-3 (Figure: PPD) Refer to the figure. Which of the following statements best explains why a firm that perfectly price discriminates would sell additional units beyond c units of output?

• A) If the firm can perfectly price discriminate it can charge a price equal to the consumers' willingness to pay, which for all units beyond c is higher than the firm's marginal cost for those units.
• B) The firm will continue to increase profits as long as consumers' willingness to pay is greater than zero.
• C) A firm will not sell beyond c units of output. The marginal cost is greater than consumers' willingness to pay for these units.
• D) A firm will not sell beyond c units of output. The marginal cost is greater than the firm's marginal revenue for these units.

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Definitions:

Co-vertices

Points on an ellipse or hyperbola that lie at the end of the minor axis.

Equation

A statement that asserts the equality of two mathematical expressions, often containing one or more variables.

Vertices

The plural of vertex, meaning the corners or points where lines meet in a geometric shape.

Co-vertices

The endpoints of the minor axis of an ellipse, considered less significant than the primary vertices.