Consider Three Pricing Strategies That the Firm Can Pursue

question 10

Multiple Choice

Consider three pricing strategies that the firm can pursue:
a. optimal two-part tariff pricing
b. perfect price discrimination
c. single-price monopoly pricing
Of these three strategies, which is most beneficial to society as a whole?

• A) Both perfect price discrimination and a two-part tariff pricing are equally beneficial in that the marginal benefit of the last unit sold equals the marginal cost of producing that unit.
• B) only perfect price discrimination because this pricing method eliminates deadweight loss
• C) single-price monopoly pricing because consumers enjoy at least some consumer surplus
• D) only two-part tariff pricing because the per-unit portion of the price is set equal to marginal cost

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Definitions:

Feature Control Frame

A rectangle used in technical drawings to describe the conditions and tolerances for a geometric control on a feature of a part.

Modifying Symbol

Symbols used in engineering drawings to specify additional requirements or modifications for geometric tolerances.

Parallelism

The condition of being parallel; in geometry, it describes lines, planes, or surfaces that, no matter how far extended, do not meet.

Perfect Form

Ideal geometric shape of an object where all points meet the exact specifications without any deviations.