Which best describes price discrimination ?

Related Mcqs:

1. In price discrimination, which section of the market is charged the higher price ?

   A. The section with the richest people
   B. The section with the oldest people
   C. The section with the most inelastic demand
   D. The section with the most elastic demand

2. Suppose that the world price of tin is above the target (ceiling) price that is defined by an international commodity agreement. To move the world price toward the target price, a buffer stock agreement would require its buffer stock manager to ____ tin and an export quota agreement would require that member countries _________ their export of tin?

   A. purchase; decrease
   B. purchase; increase
   C. sell; increase
   D. sell; decrease

3. A benefit to consumers of price discrimination is that ?

   A. Some products are produced that would not otherwise be produced
   B. Producer surplus increases
   C. Consumer surplus decreases
   D. Firm’s profits increase

4. In Price discrimination abnormal profits are made if ?

   A. Average revenue is greater than average variable cost
   B. Average revenue is greater than average cost
   C. Average revenue is greater than marginal revenue
   D. Average revenue is greater than average fixed cost

5. In perfect price discrimination ?

   A. Consumer surplus is maximised
   B. produce surplus is zero
   C. Community surplus is maximised
   D. Consumer surplus is zero

6. In perfect price discrimination ?

   A. The demand curve is the marginal cost curve
   B. The average revenue equals the average cost
   C. The marginal cost is the average cost curve
   D. The demand curve is the marginal revenue

7. By practicing price discrimination, the firm would realize profits totaling ?

   A. $160,000
   B. $420,000
   C. $540,000
   D. $660,000

8. Which of the follow statements about price discrimination is not true ?

   A. Perfect price discrimination generates a deadweight loss
   B. Price discrimination can raise economic welfare.
   C. price discrimination requires that seller be able to separate buyers according to their willingness to pay.
   D. Price discrimination increases a monopolist’s profits.
   E. For a monopolist to engage in price discrimination buyers must be unable to engage in arbitrage.

9. In order to practice price discrimination which of the following is needed ?

   A. some degree of monopoly power
   B. an ability to separate the market
   C. an ability to prevent reselling
   D. all of the above

10. Which of the following best defines price discrimination ?

    A. charging different prices on the basis of race
    B. charging different prices for goods with different costs of production
    C. charging different prices based on cost-of-service differences
    D. selling a certain product of given quality and cost per unit at different prices to different buyers