Which of the Following Occurs with Both Perfectly Price-Discriminating and Single-Price

question 60

Multiple Choice

Which of the following occurs with both perfectly price-discriminating and single-price monopolies?

• A)The amount of output is inefficient.
• B)All consumer surplus goes to the monopoly.
• C)Deadweight loss is created.
• D)There is a redistribution of consumer surplus to the monopoly.
• E)Demand is perfectly elastic.

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Definitions:

Unit Product Cost

The total cost to produce one unit of product, including direct materials, direct labor, and allocated overhead.

Contribution Margin Ratio

A financial metric that shows what percentage of sales revenue is not consumed by variable costs and therefore contributes to covering fixed costs.

Segment Margin

The profit or loss generated by a particular segment of a business, after accounting for direct and indirect costs.

Net Operating Income

The profit generated from a company's operational activities after deducting operating expenses from operating revenues.