Which of the Following Is True of Perfect Price Discrimination

question 156

Multiple Choice

Which of the following is true of perfect price discrimination?

• A)Profit is lower than it would be without discrimination.
• B)Revenue is higher than it would be without discrimination, but profit is lower.
• C)Average revenue and average cost are both higher than they would be without discrimination, so it is not certain whether profit will be higher.
• D)Consumer surplus is zero.
• E)Profit is zero.

---

Definitions:

Reverse Stock Split

A corporate action in which a company reduces the number of its existing shares to increase the share price without changing the company's valuation.

Stock Repurchase

A situation where a company buys back its own shares from the marketplace, potentially increasing the value of remaining shares.

Stock Dividend

A dividend payment made in the form of additional shares rather than a cash payout.