How Does Price Discrimination Increase Social Surplus

question 114

Multiple Choice

How does price discrimination increase social surplus?

• A) It distributes deadweight loss over many different groups.
• B) It lowers prices for certain groups.
• C) It expands the output that a firm would otherwise produce.
• D) It doesn't increase social surplus.

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Definitions:

Comparative Advantage

The ability of an entity to produce a good or service at a lower opportunity cost than its competitors.

Fewer Resources

Fewer resources refer to having a limited quantity of inputs or materials available for production or consumption compared to what is needed or demanded.

Specialization In Production

The process by which businesses or economies focus on producing a limited range of goods or services to gain greater efficiency and productivity.

International Trade

The exchange of goods and services between countries, allowing for specialization, more efficient production, and access to a broader range of products.