Why would a firm price discriminate? Because price discrimination allows the firm to
a. increase consumer surplus
b. create brand multiplication
c. select the best consumers who are willing to pay the highest price
d. convert consumer surplus into economic profit
e. shift its demand curve to the right
D
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Which of the following are examples of situations in which the standard model of the consumer may not be realistic?
A) Impulse purchases B) Following fads and fashions instead of one's own preferences C) Addictions or other strong habits in consumption D) all of the above
A lower equilibrium interest rate:
A. increases saving, reduces total spending, and increases total output. B. decreases saving, increases total spending, and decreases total output. C. increases investment, increases total spending, and increases total output. D. decreases investment, decreases total spending, and increases total output.