Chapter 11 Flashcards
1
Q
What is a monopoly?
A
A market structure in which there is only one seller of a good or service that has no close substitutes
2
Q
What is 1st degree price discrimination?
A
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
3
Q
What is 2nd degree price discrimination?
A
Occurs when the firm charges its customers different prices according to how much they purchase
4
Q
What is 3rd price discrimination?
A
Occurs when consumers are grouped into 2 or more independent markets and a separate price is charged in each market
