When Firms Price Discriminate, They

question 49

Multiple Choice

When firms price discriminate, they

• A)get additional surplus from consumers who would have bought at the profit-maximizing uniform price but lose sales because of the higher prices.
• B)maintain surplus from existing consumers but pick up additional consumers that would not have bought at the profit-maximizing uniform price.
• C)get additional surplus from consumers who would have bought at the profit-maximizing uniform price.
• D)None of the above.

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Definitions:

Automatic Slack Adjusters

Devices in air brake systems that automatically maintain the correct distance between the brake drum and brake lining to ensure effective braking.

Highway Tractors

Trucks designed primarily for the transportation of goods over long distances, characterized by a powerful engine and a cab for the driver.

Compressor

Any of a number of mechanically driven devices used to compress a gas. In trucks, compressors are used in air brake systems and A/C systems.

Ambient Air

The natural, outdoor air environment surrounding a particular area, not conditioned by heating or cooling systems.