Compared to the Situation in Which It Sets a Single

question 38

Multiple Choice

Compared to the situation in which it sets a single price,a monopoly that price discriminates ________ its economic profit and ________ its output.

• A) increases; increases
• B) increases; decreases
• C) decreases; increases
• D) decreases; decreases
• E) increases; does not change

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Definitions:

Heckscher-Ohlin Model

An economic theory that proposes countries will export products that utilize their abundant and cheap factors of production and import goods that require resources that are rare or expensive domestically.

Endowment

An endowment is the total of a person's or entity's assets, minus liabilities, considered in the context of their financial impact or wealth.

Clothing

Items worn on the body, typically made from fabrics or textiles, used for protection, adornment, or social status.

Comparative Advantage

The ability of an entity to produce a good or service at a lower opportunity cost than another entity, facilitating beneficial trade.