Describe the Debate, Pro and Con, Over the Use of Microfinance

question 6

Essay

Describe the debate, pro and con, over the use of microfinance in lower income countries.Why might it lead to the middle income trap, and do the risks outweigh the benefits?

---

Definitions:

Perfect Price Discrimination

Perfect price discrimination occurs when a seller charges each buyer their maximum willingness to pay, extracting all consumer surplus.

Total Profits

The sum of earnings from a business operation, after all expenses have been deducted from total revenue.

Price-discriminating Monopolist

A monopolist that charges different prices to different consumers or groups of consumers for the same product, not based on cost differences.

Market

Any structure that allows buyers and sellers to exchange any type of goods, services, and information.