Can a perfectly competitive firm successfully price discriminate? Hint: What does the demand curve look like for a perfectly competitive firm?
What will be an ideal response?
No, the demand curve for a perfectly competitive firm is perfectly elastic, and therefore no units are valued more or less than the others.
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Which of the following is not a cost imposed by inflation?
A) Inflation reduces the affordability of goods and services to the average consumer. B) The money that consumers and firms hold loses its purchasing power. C) Firms must pay for changing prices on products and printing new catalogs. D) Banks can lose if they under predict inflation and charge an interest rate that does not completely compensate for inflation.
What is the term that describes a situation in which one party to an economic transaction has less information than the other party?
A) inefficient market hypothesis B) asymmetric information C) unequal market structure D) monopsony