A Difference Between a Perfectly Competitive Market Equilibrium and a Perfect

question 100

Multiple Choice

A difference between a perfectly competitive market equilibrium and a perfect price discrimination equilibrium is that in a competitive market ________,whereas in perfect price discrimination ________.

• A) all units are sold where p=MC; only the last unit sold is at p=MC
• B) deadweight loss is minimized; deadweight loss increases
• C) consumers are better off; producers lose some sales due to high prices.
• D) All of the above.

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Definitions:

Discrimination

Unfair or prejudicial treatment of different categories of people or things, especially on the grounds of race, age, or sex.

Profitable

A state or condition of yielding a financial profit or gain; it is often considered after all expenses have been deducted.

Opportunity Cost

The cost of foregone alternatives; the value of the best alternative that is not chosen.

Leisure

Free time when individuals are not working, which can be used for rest, recreation, or personal activities.