(Figure: Producer Surplus I) Producer Surplus Using Perfect Price Discrimination

question 154

Multiple Choice

(Figure: Producer Surplus I) Producer surplus using perfect price discrimination is _____ greater than under perfect competition and _____ greater than under monopoly.

• A) $800; $400
• B) $1,600; $800
• C) $3,200; $1,600
• D) $4,800; $3,200

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Definitions:

Pre-approved

An initial approval indicating a customer may qualify for certain loans or credit cards, usually based on a preliminary credit information review.

Gross Annual Income

Gross Annual Income refers to the total amount of income earned in a year before any deductions are made, such as taxes and retirement contributions.

Down Payment

An initial payment made when something is bought on credit, often expressed as a percentage of the total purchase price.

Buy Down

A financing technique where points are paid upfront by a borrower to reduce the interest rate on a loan.