Reference: Ref 14-3 (Figure: PPD) Refer to the figure. Which of the following statements best explains why a firm that perfectly price discriminates would sell additional units beyond c units of output?
A) If the firm can perfectly price discriminate it can charge a price equal to the consumers' willingness to pay, which for all units beyond c is higher than the firm's marginal cost for those units.
B) The firm will continue to increase profits as long as consumers' willingness to pay is greater than zero.
C) A firm will not sell beyond c units of output. The marginal cost is greater than consumers' willingness to pay for these units.
D) A firm will not sell beyond c units of output. The marginal cost is greater than the firm's marginal revenue for these units.

Question

Reference: Ref 14-3 (Figure: PPD) Refer to the figure. Which of the following statements best explains why a firm that perfectly price discriminates would sell additional units beyond c units of output?
A) If the firm can perfectly price discriminate it can charge a price equal to the consumers' willingness to pay, which for all units beyond c is higher than the firm's marginal cost for those units. 
B) The firm will continue to increase profits as long as consumers' willingness to pay is greater than zero. 
C) A firm will not sell beyond c units of output. The marginal cost is greater than consumers' willingness to pay for these units. 
D) A firm will not sell beyond c units of output. The marginal cost is greater than the firm's marginal revenue for these units.

Quizplus · Accepted Answer

The Answer of  Reference: Ref 14-3 (Figure: PPD) Refer to the figure. Which of the following statements best explains why a firm that perfectly price discriminates would sell additional units beyond c units of output?
A) If the firm can perfectly price discriminate it can charge a price equal to the consumers' willingness to pay, which for all units beyond c is higher than the firm's marginal cost for those units. 
B) The firm will continue to increase profits as long as consumers' willingness to pay is greater than zero. 
C) A firm will not sell beyond c units of output. The marginal cost is greater than consumers' willingness to pay for these units. 
D) A firm will not sell beyond c units of output. The marginal cost is greater than the firm's marginal revenue for these units.

Reference: Ref 14-3 (Figure: PPD) Refer to the Figure