Which of the Following Statements Is True of Price Discrimination

question 88

Multiple Choice

Which of the following statements is true of price discrimination?

• A) Successful price discrimination will provide the firm with lower total profits than if it did not discriminate.
• B) Successful price discrimination will provide the firm with more profit than if it did not discriminate.
• C) Successful price discrimination will generally result in a lower level of output than would be the case under a single-price monopoly.
• D) Successful price discrimination occurs when there are differences in the costs of producing for different groups of buyers.

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Definitions:

Market Prices

The prevailing price at which goods, services, or securities are bought and sold in a market.

Brewery

An establishment focused on the production of beer through the fermentation process, which may also serve as a venue for selling and tasting.

Nominal Damages

A small monetary award (often one dollar) granted to a plaintiff when no actual damage was suffered or when the plaintiff is unable to show such loss with sufficient certainty.

Loss of the Bargain

The difference between the value of what was promised in a contract and what was actually delivered, potentially leading to damages in a breach of contract case.