Price discrimination is welfare reducing
A) False, price discrimination can increase the coverage of a market thereby increasing welfare.
B) False, price discrimination limits the coverage of a market thereby increasing welfare.
C) True, price discrimination limits the coverage of a market thereby increasing welfare.
D) True, price discrimination can increase the coverage of a market thereby increasing welfare.
A
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If the government desires to raise a certain amount of revenue by taxing a monopoly, an ad valorem tax will
A) generate the same loss of consumer surplus as a specific tax. B) generate a greater loss of consumer surplus than a specific tax. C) generate a smaller loss of consumer surplus than a specific tax. D) generate no loss of consumer surplus.
Cecilia's Cafe is a monopolistic competitor. If Cecilia's is currently producing at the output level at which her average total cost is minimized and the cafe is earning an economic profit, then, in the long run, output will
a. decline and average total cost will increase b. decline and average total cost will decrease c. remain unchanged as Cecilia's strives to minimize costs d. increase and average total cost will be greater e. increase and average total cost will be smaller