Why Is Price Discrimination Legal but Not Discrimination Based on Race

question 137

Multiple Choice

Why is price discrimination legal but not discrimination based on race or gender?

• A)because price discrimination increases profits and therefore tax revenues for the government, but discrimination based on race or gender reduces tax revenues
• B)because price discrimination reduces deadweight loss, but discrimination based on race or gender increases deadweight loss
• C)because price discrimination involves charging people different prices based on their willingness to pay rather than on the basis of arbitrary characteristics
• D)because price discrimination enables firms to increase output and employment, but race- or gender-based discrimination reduces employment

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Definitions:

Blank Indorsement

An endorsement on a financial instrument, such as a check, that specifies no endorsee, making it payable to the bearer.

Trust

A fiduciary relationship in which one party, known as a trustor, gives another party, the trustee, the right to hold title to property or assets for the benefit of a third party, the beneficiary.

Deposit Only

A restriction placed on a bank account, indicating that the funds can only be deposited and cannot be directly withdrawn or used for other transactions.

Restrictive Endorsements

Limiting conditions or instructions written on the back of negotiable instruments, like checks, controlling their use or further transfer.