Identify the Truthfulness of the Following Statements

question 47

Multiple Choice

Identify the truthfulness of the following statements. I. If a seller engages in second-degree price discrimination, the seller captures more producer surplus than with uniform pricing.
II) The seller captures the maximum producer surplus by engaging in block pricing.

• A) Both I and II are true.
• B) Both I and II are false.
• C) I is true; II is false.
• D) I is false; II is true.

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Definitions:

Variable Costs

Variable costs are expenses that vary directly with the level of production or output, such as materials and labor used in the manufacturing process.

Fixed Costs

Expenses that do not change with the level of output or sales, such as rent, salaries, and insurance premiums.

Long Run

The Long Run is a period in economics during which all factors of production and costs are variable, allowing for adjustment to changing market conditions.

Fixed Amount

A specific, unchanging quantity of something.