Tackle the Test: Multiple-Choice Questions

1. Question

   Which of the following characteristics is necessary in order for a firm to price-discriminate?

   A.

   free entry and exit

   B.

   differentiated product

   C.

   many sellers

   D.

   some control over price

   E.

   horizontal demand curve

   Which of the following characteristics is necessary in order for a firm to pric

2. Question

   Price discrimination

   A.

   is the opposite of volume discounts.

   B.

   is a practice limited to movie theaters and the airline industry.

   C.

   can lead to increased efficiency in the market.

   D.

   rarely occurs in the real world.

   E.

   helps to increase the profit of perfect competitors.

   Price discrimination

3. Question

   With perfect price discrimination, consumer surplus

   A.

   is maximized.

   B.

   equals zero.

   C.

   is increased.

   D.

   cannot be determined.

   E.

   is the area below the demand curve and above the marginal cost curve.

   With perfect price discrimination, consumer surplus

4. Question

   Which of the following is a technique used by price-discriminating monopolists?

   
   

   
   

   1. advance purchase restrictions

      
      
   
   

   2. two-part tariffs

      
      
   
   

   3. volume discounts

      
      
   
   

   A.

   I only

   B.

   II only

   C.

   III only

   D.

   I and II only

   E.

   I, II, and III

   Which of the following is a technique used by pric

5. Question

   A price-discriminating monopolist will charge a higher price to consumers with

   A.

   a more inelastic demand.

   B.

   a less inelastic demand.

   C.

   higher income.

   D.

   lower willingness to pay.

   E.

   less experience in the market.

   A pric