How Does Price Discrimination Help Us Understand How Many Markets

question 15

Multiple Choice

How does price discrimination help us understand how many markets actually function?

• A) All firms will practice price discrimination unless a government prohibits the practice.
• B) Monopolistic competition is rare,so economists are able to focus in on the few firms that engage in the practice.
• C) Instances of perfectly competitive markets and monopoly are rare.
• D) Antidiscrimination laws are widespread,so models explaining price discrimination help us better understand markets that we are unable to witness.
• E) Monopolistic competition is the most common market form,but it is the only one that does not engage in price discrimination.

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Definitions:

Denitrification

A microbial process occurring mostly in soil and aquatic environments, where nitrate is reduced and ultimately produces molecular nitrogen, removing it from the ecosystem.

Hydrologic Cycle

The water cycle, which includes evaporation, precipitation, and flow to the ocean; supplies terrestrial organisms with a continual supply of fresh water.

Nitrification

The conversion of ammonia (NH3) to nitrate (NO3-) by certain bacteria (nitrifying bacteria) in the soil; part of the nitrogen cycle.

Transpiration

is the process by which moisture is carried through plants from roots to small pores on the underside of leaves, where it changes to vapor and is released to the atmosphere.