ECON MICRO
5th Edition
ISBN: 9781337000536
Author: William A. McEachern
Publisher: Cengage Learning
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Question
Chapter 9, Problem 6.8P
To determine
Conditions required by the monopolist for successful
Concept Introduction:
Price discrimination refers to a strategy that enables different customers to pay different prices for the same product or service. The seller charges different prices from different buyers based on the certain criterion.
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27.
Price discrimination creates economic inefficiency.
False
True
True, if the firm is a monopolist, otherwise false.
True, if the firm is perfect competitor, otherwise false.
5. Conditions for price discrimination
Price discrimination is the practice of charging different prices for the same product that are not justified by cost differences.
Evaluate the following statement: "Price discrimination requires market segmentation."
False, because the monopolist can never charge anyone their maximum willingness to pay anyway
False, because the monopolist does not need to know people's willingness to pay for its goods
None of these choices
True, because the monopolist needs to know the willingness to pay of different groups of consumers
A pure monopoly sells 6 units of a product per day at a unit price of $15. If it lowers the price to $14, its total revenue increases by $22. This implies that its sold output increases by _____. rev: 05_15_2018
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- 5.1.3 Discuss varieties of price discriminationarrow_forwardQ48' Assume that Cresco Labs is a monopolist that can sell 15 ounces of marijuana per day at $12.50 for each ounce. To sell 16 ounces of marijuana per day, the price must be cut to $12.20. The marginal revenue of the 16th ounce is Multiple Choice $12. $7.70 . $16. $-0.30. $12.20.arrow_forwardQ28 If a single-price monopoly is presently producing an output at which marginal cost is less than marginal revenue, it can increase its profits by... a. Reducing output and keeping prices unchanged. b. Expanding output and raising price. c. Expanding output and lowering price. d. Reducing output and raising prices. e. Reducing barriers to entry.arrow_forward
- 17- Intellectual property law is a body of law that includes Group of answer choices the right of inventors to produce their inventions the right of inventors to sell their inventions trademark, patent and trade secret legislation copyright legislation, as well as all of the abovearrow_forward9-6 Explain why a firm with market power might decide to charge different groups different prices8. (Conditions for Price Discrimination) List three conditions that must be met for a monopolist to price discriminate successfully.arrow_forwardQuestion 1b. Give two examples of price discrimination. In each case, explain why themonopolist chooses to follow this business strategyarrow_forward
- QUESTION 19 An industry is a natural monopoly when a single firm can supply a good or service to an entire market at a larger cost than could two or more firms. True Falsearrow_forward10 If the government determines that a natural monopoly must set a price equal to its average cost plus 10%, this is an example of Question 22 options: Cost-plus regulation Price cap regulation Restrictive prices Antitrust lawarrow_forwardMath Problem: Suppose that a monopolist, who sells all units at a uniform price, faces an inverse market demand curve P=100- 2Q. If the firm’s total cost were instead positive, given by the function TC=10Q, what output would the firm produce to maximize profit, what price would the firm charge, and what profit would the firm earn? Give the numerical value of these three variables. Typed answer please. I ll ratearrow_forward
- True/ False There is a price discrimination in the monopoly market.arrow_forwardQuestion: Discuss the concept of price discrimination and provide examples of industries where it is commonly used.Please Dont use AI tool.arrow_forwardQ1-Select the true or false for the following statement also give the explanation and support your answer with graphical presentation where necessary. Explanation is compulsory 3 to 6 line. A monopoly maximizes profit by choosing the quantity at which marginal revenue greater than marginal cost.arrow_forward
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