Question :
91) Refer to Figure 10-4. Suppose this monopolist practicing perfect : 1384243
91) Refer to Figure 10-4. Suppose this monopolist is practicing perfect price discrimination. How does this differ from the situation where this firm is charging a single price for its product?
A) The firm is producing the same quantity, has successfully identified different segments of the market, and is able to capture some of the consumer surplus.
B) The firm is restricting output to a level below that of the single-price monopolist, and thereby raises the price of its product and earns higher profits.
C) The firm is producing a smaller quantity, is charging a different price for each unit sold and is earning higher profits.
D) The firm is producing the same quantity, but charging a different price for each unit sold and is earning higher profits.
E) The firm is producing a higher quantity, is charging a different price for each unit sold and is earning higher profits.
92) Relative to a firm that must charge a single price for all of its output, the ability to charge multiple prices gives a firm with market power the ability to capture some or all of the
A) producer surplus.
B) consumer surplus.
C) fixed costs.
D) variable costs.
E) marginal costs.
93) Price discrimination, if possible, allows a price-setting firm to increase its profits by
A) shifting its cost curves downward.
B) raising the price above the competitive price.
C) charging different prices according to the willingness to pay of each consumer.
D) reducing costs through a reduction in output.
E) charging different prices according to the different marginal cost on each unit.
94) Suppose the market for some product can be divided into two segments, each with a linear demand curve. A monopolist can set a different price (but only one price) in each segment. The profit-maximizing price discrimination across these two market segments will lead to
A) higher output with average revenue higher than the best single price.
B) lower output with total revenue higher than the single best price.
C) lower output with a higher average revenue than the best single price.
D) higher output with average revenue lower than the best single price.
E) the same output but higher average revenue than the best single price.
95) One reason movie theatres charge a lower admission price to senior citizens is that
A) movie-theatre owners are able to practice perfect price discrimination.
B) government sets the price policies.
C) senior citizens have a more elastic demand than other movie-goers.
D) senior citizens have a less elastic demand than other movie-goers.
E) senior citizens have a higher willingness-to-pay than other people.
96) Which one of the following cases is NOT an example of price discrimination?
A) Airlines charge different fares for business people than tourist travelers.
B) Young males are charged higher premiums for car insurance than older males or women.
C) A local phone company charges different telephone rates to residential and business users.
D) Electric companies charge different rates to commercial and residential users for electricity.
E) Theatres charge different rates for different age groups.
97) Which of the following is probably NOT an example of price discrimination?
A) A doctor charging for his services according to the income of his patients.
B) Train fares that are less expensive for weekend travel than weekday travel.
C) A theatre charging children under 12 less for a movie ticket than it charges an adult.
D) Universities charging out-of-province students higher tuition fees.
E) A supermarket charging more for strawberries in December than in June.
98) Which of the following statements about a monopoly practicing perfect price discrimination is correct?
A) The profit-maximizing criterion is MR = P, the same as for perfect competition.
B) The demand curve is also the marginal-revenue curve.
C) It will charge higher prices in those market segments with more elastic demand.
D) The output will always be less than that produced by a single-price monopolist.
E) Total costs will be lower than that of a single-price monopolist.
99) If a monopolist is practicing perfect price discrimination, then the following equation is true:
A) MR = P for all units.
B) MR = 1/2 P for any unit.
C) AR = ATC at the profit-maximizing level of output.
D) MC = 1/2 MR at the profit-maximizing level of output.
E) P = AVC at the profit-maximizing level of output.
100) If a monopolist is practicing perfect price discrimination, then
A) the producer surplus is zero.
B) consumer surplus is zero.
C) costs are lower than for the non-price-discriminating monopolist.
D) demand must be inelastic.
E) the monopolist is not profit maximizing.
