If a Market Is Controlled by One Perfect Price Discriminator

question 23

Essay

If a market is controlled by one perfect price discriminator who is able to charge each consumer the highest price that consumer is willing to pay,the seller will produce output until the price paid by the last consumer is equal to the marginal cost of making the good.That is,the price of the last good equals the marginal cost of making the good.If welfare is measured as consumer surplus plus producer surplus,compare this market structure to a competitive market in terms of efficiency and equity.

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Definitions:

Cross-sectional Studies

Research that analyzes data from a population, or a representative subset, at a specific point in time to examine relationships between variables.

Cohort Effects

Differences among people that stem from being born at different times or periods, leading to distinctive formative experiences.

Intelligence Tests

Standardized tools designed to measure a person's cognitive abilities and intellectual potential.

Testing Bias

A flaw in the design, administration, or interpretation of tests that results in systematically unfair outcomes or assessments for certain groups of people.