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

-Price discrimination is best described as a monopolist:
A)selling a product at the fixed market determined price.
B)charging buyers an excessive price for the product.
C)charging different customers different prices when the costs are equal.
D)selling a product for different prices during two different periods of time.
E)charging same prices to different customers when the costs are different.

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
 
-Price discrimination is best described as a monopolist:
A)selling a product at the fixed market determined price. 
B)charging buyers an excessive price for the product. 
C)charging different customers different prices when the costs are equal. 
D)selling a product for different prices during two different periods of time. 
E)charging same prices to different customers when the costs are different.

Quizplus · Accepted Answer

Price discrimination occurs when a firm charges different customers different prices for the same product when the costs are equal. This is different from charging excessive prices or selling at a fixed market price. It is also different from selling at different prices during different periods of time or charging the same prices to different customers with different costs. In this case, the table shows that the monopolist is charging different prices, and therefore engaging in price discrimination.

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