Use the Following to Answer Questions

question 125

Multiple Choice

Use the following to answer questions:
Figure: PPD
-(Figure: PPD) Refer to the figure. Which of the following statements best explains why a firm that perfectly price discriminates would sell additional units beyond a units of output?

• A) A firm will not sell beyond a units of output. The firm will only sell exactly a, as it is the profit-maximizing rate of output for this firm.
• B) The marginal cost is less than consumers' willingness to pay for these units.
• C) The marginal cost is greater than consumers' willingness to pay for these units.
• D) A firm will not sell beyond a units of output, since the marginal cost is greater than the marginal revenue for these units.