A Monopolist's Profits with Price Discrimination Will Be

question 222

Multiple Choice

A monopolist's profits with price discrimination will be

• A)lower than if the firm charged a single, profit-maximizing price.
• B)the same as if the firm charged a single, profit-maximizing price.
• C)higher than if the firm charged just one price because the firm will capture more consumer surplus.
• D)higher than if the firm charged a single price because the costs of selling the good will be lower.

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Definitions:

Accounts Payable

Liabilities of a company or an individual due to creditors for goods and services received but not yet paid for.

Earnings Per Share

A measure of a company's profitability that is calculated by dividing its net earnings available to common shareholders by the average outstanding shares.

Common Stock

Represents equity ownership in a corporation, providing voting rights and entitling the holder to a share of the company's success through dividends and/or capital appreciation.

Fixed Asset Turnover

A financial ratio that measures a company's effectiveness in generating sales from its fixed assets.