What is price discrimination? Can a perfectly competitive firm price discriminate? Explain you answer
What will be an ideal response?
Price discrimination is the practice of selling different units of a good or service for different prices. A perfectly competitive firm cannot influence the price of its product—it is a price taker. So a perfectly competitive firm cannot price discriminate.
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Which of the following is a thrift institution? i. a credit union ii. the Fed iii. a savings bank
A) i only B) ii only C) iii only D) Both i and iii E) i, ii, and iii
With an increase in the demand for a good, if prices are not allowed to increase:
A) social surplus will be maintained at maximum. B) there will be no incentive for firms to increase the quantity supplied of the good. C) a surplus will occur in the market. D) there will be an increase in overall efficiency in the market.