Which of the Following Is TRUE

question 235

Multiple Choice

Which of the following is TRUE?

• A) Monopoly results in a higher quantity of output being sold compared with perfect competition.
• B) Price discrimination occurs when there are differences in prices that reflect differences in marginal cost.
• C) Charging all customers the same price when costs vary can actually be a case of price discrimination.
• D) Price discrimination guarantees that the monopolist will make a profit.

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Definitions:

Pretax Income

The income that a company earns before any taxes are deducted, representing the profitability of the company before government intervention.

Break-even Point

The level of production or sales at which total costs equal total revenues, resulting in no profit or loss.

Fixed Costs

Costs that are constant regardless of the volume of goods or services produced by a company, including lease payments and maintenance expenditures.

Variable Costs

Disbursements that are contingent upon the magnitude of production or sales transactions.