Chapter 11

Question 1

What is a monopoly?

Answer 1

A market structure in which there is only one seller of a good or service that has no close substitutes

Question 2

What is 1st degree price discrimination?

Answer 2

Occurs when each consumer is charged the maximum price he or she is prepared to pay for each unit of product

~Also known as perfect price discrimination

Question 3

What is 2nd degree price discrimination?

Answer 3

Occurs when the firm charges its customers different prices according to how much they purchase

Question 4

What is 3rd price discrimination?

Answer 4

Occurs when consumers are grouped into 2 or more independent markets and a separate price is charged in each market