A Firm Practices Price Discrimination by Selling at a High

question 54

Multiple Choice

A firm practices price discrimination by selling at a high price in its larger market, Market A, and a lower price in its smaller market, Market B. If this firm is forced to sell at a single price in both markets and opts for the original price in Market A, the new single-pricing strategy makes consumers in:

• A) both Market A and Market B worse off.
• B) Market A no worse off but consumers in Market B worse off.
• C) Market B no worse off but consumers in Market A worse off.
• D) both markets better off, as single pricing is always better for consumers than price discrimination.

Recognize the effects of fiscal policy on recession and inflation.

Understand the implications of government expenditures and tax receipts on public debt.

Identify the objectives of stabilization policies.

Understand the significance of government spending and taxation changes on economic activity.

---

Definitions:

Income

Money received on a regular basis from work, investments, business ventures, or other sources.

Medicaid Benefits

Medicaid Benefits are health care program benefits provided by the state and federal government to eligible low-income adults, children, pregnant women, elderly adults, and people with disabilities.

Poverty Threshold

The smallest income level considered essential for securing a satisfactory standard of living within a certain country.

Real Per Capita Income

Income per person, adjusted for inflation, reflecting the average income level of individuals within a country or region.