Consider Three Pricing Strategies That the Firm Can Pursue

question 10

Multiple Choice

Consider three pricing strategies that the firm can pursue:
a. optimal two-part tariff pricing
b. perfect price discrimination
c. single-price monopoly pricing
Of these three strategies, which is most beneficial to society as a whole?

• A) Both perfect price discrimination and a two-part tariff pricing are equally beneficial in that the marginal benefit of the last unit sold equals the marginal cost of producing that unit.
• B) only perfect price discrimination because this pricing method eliminates deadweight loss
• C) single-price monopoly pricing because consumers enjoy at least some consumer surplus
• D) only two-part tariff pricing because the per-unit portion of the price is set equal to marginal cost

---

Definitions:

Aggressively

In a manner that is forceful, assertive, or with intent to dominate or harm.

Punishment

A process by which a consequence immediately follows a behavior, decreasing the likelihood that the behavior will be repeated.

Bedwetting

A condition often seen in children, where involuntary urination occurs during sleep, also known as nocturnal enuresis.

Insight Learning

A form of cognitive learning where problem-solving occurs by means of a sudden reorganization of perceptions, leading to the solution without trial-and-error behavior.