Which of the Following Statements Regarding a Monopoly's First-Degree Price

question 13

Multiple Choice

Which of the following statements regarding a monopoly's first-degree price discrimination is correct?

• A)With first-degree price discrimination, consumer surplus is small, yet still greater than zero.
• B)With first-degree price discrimination, producer surplus is lower than with uniform pricing.
• C)With first-degree price discrimination, deadweight loss is large.
• D)With first-degree price discrimination, total surplus is greater than when the monopoly charges a uniform price.

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Definitions:

United States Treasury

A government department responsible for managing federal finances, issuing currency, collecting taxes, and paying bills on behalf of the United States government.

Primary Reserves

Assets that are held by banks that are readily available to meet immediate withdrawal demands, such as cash and deposits with central banks.

Excess Reserves

Funds that banks hold over and above the required minimum reserves specified by central banking authorities, which can be loaned out or invested.

Reserve Requirements

The minimum amount of reserves that banks must hold against deposits, set by central banks to ensure liquidity and control the money supply.