Elmdale, a small isolated town, has one psychiatrist. For a 45-minute consultati

Question

Elmdale, a small isolated town, has one psychiatrist.

For a 45-minute consultation, the psychiatrist charges a man twice as much as a woman.

The psychiatrist ______ practicing price discrimination because ______.

A. is; all monopolies practise price discrimination

B. is not; menmen and womenwomen are willing to pay a different price for the same service

C. is not;menmen could travel to another location and pay a cheaper price

D. is; menmen and womenwomen are paying a different price for the same service

E. is not; each person is not paying the maximum price that they are willing to pay

The psychiatrist _____ using resources efficiently because ______.

A. is not; the sum of consumer surplus and producer surplus is maximized

B. is not; no deadweight loss is created

C. is; no deadweight loss is created

D. is; the sum of consumer surplus and producer surplus is maximized

E. is not; a deadweight loss is created

This pricing system ______.

A. takes some consumer surplus from the psychiatrist and redistributes it to the consumer as economic profit

B. takes some consumer surplus from the consumer and redistributes it to the tpsychiatrist as consumer surplus

C. takes some consumer surplus from the consumer and redistributes it to the psychiatrist as economic profit

D. increases consumer surplus

E. does not change the amount of consumer surplus

Explanation / Answer

First question is answered below

1.

Correct option: (D) men and women are paying a different price for the same service

Reason: In the given case, the firm is charging different prices from different genders for the same service, which counts as price discrimination .

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