When a Monopoly Practices Price Discrimination

question 82

Multiple Choice

When a monopoly practices price discrimination

• A)it charges different prices to different consumers and transfers some of the consumer surplus to economic profit.
• B)it produces a smaller quantity than when it is a single-price monopoly which decreases consumer surplus.
• C)new firms enter the industry,so buyers have more goods from which to choose and consumer surplus increases.
• D)consumer surplus increases because the monopoly increases the quantity available for sale.
• E)firms exit the industry and consumer surplus decreases.

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Definitions:

Cognitive

Relating to mental activities such as thinking, understanding, learning, and remembering.

Behavioral

Pertaining to or concerned with the actions or activities of individuals, often studied to understand their motivations, decision-making processes, and patterns.

Affective

Relating to moods, feelings, and attitudes, often used in psychology and marketing to describe emotional responses.

Reinforcement

In marketing, it refers to strategies aimed at encouraging the repetition of a desired consumer behavior.