ce discrimination allows a monopolist to: h charge those customers with a greate

Question

ce discrimination allows a monopolist to: h charge those customers with a greater willingness to pay a higher price, d. avoid having to make a pricing decision and leave it to government regulators. a. the marginal revenue curve lies below the demand curve because any b. the marginal revenue curve lies below the demand curve because the firm c. the marginal revenue curve lies above the demand curve because the monopoly Pri charge each customer the same high price, even though some customers are willing to pay more than others. a. resulting in higher profit. charge a price for its product that exceeds the cost of producing it. 5. For a fim with monopoly power that cannot engage in price discrimination reduction in price applies only to the last unit sold. must lower price on all units in order to sell a higher level of output firm can charge any price it wishes. total revenue is a linear function of output because sales are independent of product price d.

Explanation / Answer

4. b) charge those customers with a greater willingness to pay a higher price, resulting in higher profit.

Price discrimination is a practise of charging different prices from different customers according to their willingness to pay. It results in zero consumer surplus as producer transfers all surplus into producer surplus.

5. b) the marginal revenue curve lies below the demand curve because the firm must lower price on all units in order to sell a higher level of output.

To sell more units of output, a firm has to lower price of all units of goods when firm is not price discriminating.

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