Perfect Price Discrimination

question 453

Multiple Choice

Perfect price discrimination

• A)increases profits to the firm.
• B)increases total surplus.
• C)decreases consumer surplus.
• D)All of the above are correct.

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Definitions:

Competitive Equilibrium

Competitive equilibrium is a market condition where supply equals demand, with no incentive for price or quantity adjustments.

Pure Exchange

An economic model that assumes no production and focuses solely on the redistribution of existing goods and services among individuals based on preferences and initial endowments.

Partial Equilibrium Analysis

An economic analysis that considers the equilibrium in a single market or industry without taking into account the effects from other markets or industries.

General Equilibrium

An economic state where supply and demand are balanced across all markets in the economy simultaneously.