Figure 16-3 Chantal Owns a Hairdressing Salon Which Caters to Two Main

question 17

Multiple Choice

Figure 16-3

Chantal owns a hairdressing salon which caters to two main groups of customers: residents of "The Chateau," a retirement community, and other residents in the neighborhood. Figure 16-3 shows the demand curves for the residents of the retirement community, labeled Market A, and other residents in the neighborhood, labeled Market B. The demand curves are not identical.
-Refer to Figure 16-3.Suppose Chantal practices price discrimination.Which of the following statements is true?

• A)Chantal's profits will be higher if she has uniform pricing instead of different prices for different groups of customers.
• B)By charging a higher price in market B, Chantal has transferred some of the consumer surplus from customers in market B to customers in market A.
• C)By charging different prices in markets A and B, Chantal can transfer some producer surplus into economic profit.
• D)By charging a higher price in market B, Chantal can convert some consumer surplus into economic profit.

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Definitions:

Confidence Interval

A span of numbers, obtained through statistical methods, expected to encompass the actual value of an unspecified population parameter.

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An individual's current relationship with smoking, including categories such as current smoker, former smoker, or never smoked.

Margin of Error

The range within which the true value of a population parameter lies, with a given level of confidence, based on sample data.

Confidence Interval

An estimated range of values calculated from a given set of data, predicting where an unknown population parameter might fall with a certain degree of confidence.