The table given below shows the price, marginal revenue and marginal cost of a monopolist at different levels of the output. The firm does not incur a fixed cost of production.Table 11.4

-The ability of a firm to charge different customers different prices is called _____.
A)price ceiling
B)price discrimination
C)predatory pricing
D)price flooring
E)base point pricing

Question

The table given below shows the price, marginal revenue and marginal cost of a monopolist at different levels of the output. The firm does not incur a fixed cost of production.Table 11.4
 
-The ability of a firm to charge different customers different prices is called _____.
A)price ceiling 
B)price discrimination 
C)predatory pricing 
D)price flooring 
E)base point pricing

Quizplus · Accepted Answer

Price discrimination refers to the ability of a firm to charge different customers different prices. This allows the firm to increase its profits by charging higher prices to customers who are willing to pay more, while also making sales to customers who are willing to pay a lower price. In this case, the monopolist can use price discrimination to increase profits by charging higher prices to customers with a higher willingness to pay and lower prices to customers with a lower willingness to pay.

The Table Given Below Shows the Price, Marginal Revenue and Marginal