Which of the Following Is Necessary for a Monopolist to Price

question 254

Multiple Choice

Which of the following is necessary for a monopolist to price discriminate between groups?

• A) The groups are identifiable.
• B) The groups have different willingness to pay.
• C) A customer from one group cannot resell to a customer in another group.
• D) All of the above conditions are necessary for the monopolist to price discriminate.

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Definitions:

Shut Down

The process of ceasing operations, typically in a business context, either temporarily or permanently.

AVC

Average Variable Cost, which is the total variable costs of production divided by the quantity of output produced.

Average Variable Cost

The variable costs associated with production when divided by the total units manufactured, indicating the cost per unit that varies.

Average Fixed Cost

The fixed costs of production (costs that do not change with the level of output) divided by the quantity of output produced, decreasing as production increases.