Question : 11) The key idea behind price discrimination to convert consumer : 1241245

11) The key idea behind price discrimination is to convert consumer surplus into

A) a barrier to entry.

B) economic profit.

C) deadweight loss.

D) monopoly power.

E) total cost.

12) If a firm successfully price discriminates, it increases

i.consumer surplus.

ii.deadweight loss.

iii.economic profit.

A) i only

B) ii only

C) iii only

D) i and iii

E) i and ii

13) Arnie’s Airlines is a monopoly airline that is able to price discriminate. If Arnie’s decides to price discriminate, then

A) Arnie’s profit increases.

B) consumer surplus increases.

C) Arnie’s revenues decrease.

D) Arnie’s sells fewer tickets.

E) Arnie can no longer set a price that depends upon the buyer’s willingness to pay.

14) Arnie’s Airlines decides to offer different fares to different customers for the same trip. Arnie’s price discriminates because Arnie

A) wants to convert consumer surplus to deadweight loss.

B) wants to help some buyers with lower fares.

C) has different costs for the same flight.

D) wants to convert consumer surplus to economic profit.

E) wants to convert producer surplus to consumer surplus.

15) Which of the following is true regarding price discrimination?

i.It converts consumer surplus to economic profit.

ii.A price discriminator must be a monopoly.

iii.To be able to price discriminate, the firm must be able to identify different types of buyers.

A) i and ii

B) i and iii

C) ii and iii

D) ii only

E) i, ii, and iii

16) Compared to the situation in which it sets a single price, a monopoly that price discriminates ________ its economic profit and ________ its output.

A) increases; increases

B) increases; decreases

C) decreases; increases

D) decreases; decreases

E) increases; does not change

17) A “buy one, get one for half price” promotion is an example of

A) price discriminating among units of a good.

B) price discriminating among groups of buyers.

C) a legal monopoly.

D) a natural monopoly.

E) marketing by a perfectly competitive firm designed to increase the firm’s sales.

18) Why do publishers print the first edition of a book by a popular author in hard cover and not in paperback?

A) Hard cover books are long lasting and paperbacks can rip easily.

B) Readers who want to read the book as soon as it comes out will be willing to pay a higher price compared to those who can wait for the paperback edition.

C) A hardcover is the publishers’ way of rewarding the avid readers.

D) Publishers are not sure of the demand.

E) Publishers cannot price discriminate.

19) Which of the following statements about price discrimination is false?

A) Price discrimination is a method for a seller to capture some consumer surplus.

B) Compared to a single-price monopoly, the number of units sold increases when a monopoly price discriminates.

C) Charging less for a second pizza that is identical to the first is an example of price discrimination.

D) Price discrimination increases a monopoly’s profit.

E) All forms of price discrimination are illegal.

20) If a firm is able to convert every dollar of consumer surplus to economic profit, the firm has achieved

A) discrimination among units of a good.

B) discrimination between groups of buyers.

C) perfect price discrimination.

D) perfect cost minimization.

E) the normal amount of economic profit.