Compared to Setting a Single Price,if a Firm Can Price

question 326

Multiple Choice

Compared to setting a single price,if a firm can price discriminate it

• A) makes a larger economic profit.
• B) makes a lower economic profit.
• C) makes zero economic profit.
• D) has no change in its economic profit from when it set a single price.
• E) might increase, decrease, or not change its economic profit depending on whether as a single-price monopoly its marginal revenue curve was above, below, or the same as its demand curve.

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Definitions:

Marginal Product

The extra production achieved by the use of an extra unit of a specific input while keeping other inputs unchanged.

Resource Demand Curve

A graph showing the relationship between the price of a resource and the quantity of that resource demanded by firms.

Imperfectly Competitive

A market structure where the conditions for perfect competition are not fully met, including monopolistic competition and oligopoly.

Purely Competitive

A market scenario where there are many buyers and sellers, each has no influence over the price of products, leading to perfect competition.