If a Monopoly Is Able to Perfectly Price Discriminate,then Consumer

question 165

Multiple Choice

If a monopoly is able to perfectly price discriminate,then consumer surplus is

• A) equal to zero.
• B) maximized.
• C) unchanged from what it is with a single-price monopoly.
• D) unchanged from what it is in a perfectly competitive industry.
• E) not zero but is less than with a single-price monopoly.

Explain the differences in cost between debt and equity financing.

Understand the calculation and application of the Weighted Average Cost of Capital (WACC).

Describe the impact of taxes on the cost of capital.

Distinguish between the book value and market value of capital and their relevance in financial analysis.

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Definitions:

Marginal Utility

The additional satisfaction or benefit gained from consuming one more unit of a good or service.

Indifference Curve

A graphical representation showing combinations of goods among which a consumer is indifferent, indicating the same level of utility or satisfaction.

Budget Line

The graphical depiction of the trade-off between two goods, demonstrating the combinations that a consumer can afford based on their income and the goods' prices.

Marginal Utility

The change in total satisfaction received from consuming one additional unit of a good or service.