If a Monopolist Is Practicing Perfect Price Discrimination,then

question 94

Multiple Choice

If a monopolist is practicing perfect price discrimination,then

• A)the producer surplus is zero.
• B)consumer surplus is zero.
• C)costs are lower than for the non-price-discriminating monopolist.
• D)demand must be inelastic.
• E)the monopolist is not profit maximizing.

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Definitions:

Put Bonds

Bonds that grant the holder the right to force the issuer to buy back the bond at a predetermined price before maturity.

Convertible

A financial security (for example, a bond or a preferred stock) that can be converted into a different form, often common stock.

Bonds

Debt securities issued by entities such as corporations or governments to raise capital, promising to pay back the principal along with interest on specified dates.

European-Style Option

A contract that gives the holder the right, but not the obligation, to buy or sell an underlying asset at a specified price on the expiration date only.