When Is Price Discrimination a Rational Strategy for a Profit-Maximizing

question 169

Multiple Choice

When is price discrimination a rational strategy for a profit-maximizing monopolist

• A)when the monopolist finds itself able to produce only limited amounts of output
• B)when consumers are unable to be segmented into identifiable markets
• C)when the monopolist wishes to increase the deadweight loss that results from profit-maximizing behaviour
• D)when there is no opportunity for arbitrage across market segmentations

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Definitions:

Coefficient of Determination

A measure in statistics that shows the proportion of the variance in the dependent variable that is predictable from the independent variable(s).

SSE

Sum of Squared Errors; a measure of the discrepancy between the data and an estimation model.

Regression Coefficients

Quantitative measures that assess the relationship between the dependent variable and each independent variable in regression analysis.

Null Hypothesis

A hypothesis that states there is no statistical significance between two variables and any observed difference is due to chance.