Assume That a Monopolist Practices Perfect Price Discrimination

question 44

Multiple Choice

Assume that a monopolist practices perfect price discrimination. The firm's marginal revenue curve will

• A) be perfectly elastic.
• B) be equal to its demand curve.
• C) will be perfectly inelastic.
• D) will lie below its demand curve.

---

Definitions:

Real GDP

Real Gross Domestic Product, which factors in inflation to evaluate the total value of goods and services produced by an economy in actual terms.

Expansionary Gap

A situation where the actual output of an economy exceeds the potential output, often leading to increased inflation.

Self-correction

The process by which market mechanisms adjust to eliminate economic imbalances, leading to the restoration of equilibrium without external intervention.

Real Wages

Wages adjusted for inflation, reflecting the true purchasing power of income earned from labor.