When a Firm Engages in Perfect Price Discrimination

question 203

Multiple Choice

When a firm engages in perfect price discrimination,

• A)marginal revenue is equal to price
• B)marginal revenue is below price
• C)marginal revenue is below marginal cost
• D)profits are reduced relative to a single-price monopolist
• E)rent-seeking behavior must occur

Understand how government policies, such as excise taxes, can influence market outcomes and efficiency.

Explore the effect of removing excise taxes on market surplus and government revenue.

Understand the effect of taxes on the burden shared between employers and employees.

Analyze how the elasticity of demand and supply influences the outcomes of tax policies.

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