If a Monopoly Charges Higher Prices to Consumers Who Buy

question 24

Multiple Choice

If a monopoly charges higher prices to consumers who buy smaller quantities than to consumers who buy larger quantities,then

• A) consumer surplus is larger than under single-price monopoly.
• B) social welfare is larger than under perfect competition.
• C) the monopoly's profits are larger than under single-price monopoly.
• D) the monopoly's profits are larger than under perfect price discrimination.

---

Definitions:

Budgeted Production

The quantity of products a company plans to produce over a certain period, as determined during the budgeting process.

Budgeted Production

An estimate of the number of units that should be produced in a period to meet anticipated sales.

Direct Labor Costs

Expenses associated with the wages and benefits of employees who are directly involved in the production of goods or services.

Budgeted Manufacturing Overhead

Budgeted manufacturing overhead is the estimated amount of indirect costs that are expected to be incurred in the manufacturing process during a specified period.