Which of the following is not necessary for price discrimination to occur?
a. a downward-sloping demand curve facing the firm
b. control over price by the firm
c. the firm can easily distinguish groups with different price elasticities
d. the firm can easily prevent resale of the good by lower-price customers
e. economies of scale exist
QUESTION 2Business conduct that is illegal per se is illegal
a. only if there is no economic rationale for it
b. only if it results in a monopoly
c. without regard to its economic rationale or consequences
d. only if it is prohibited by the Clayton Act
e. whether or not Congress has passed legislation prohibiting the practice
QUESTION 3Suppose a perfectly competitive constant-cost industry is in long-run equilibrium when market demand suddenly falls. What happens to the industry in the long run?
a. It experiences no change form the original equilibrium
b. It experiences a higher equilibrium price and produces more output
c. It experiences a lower equilibrium price but produces more output
d. It experiences the same equilibrium price but produces more output
e. It experiences the same equilibrium price but produces less output
QUESTION 4For which of the following products would price discrimination be most difficult?
a. photograph developing
b. tooth extractions
c. airline tickets
d. beer
e. college education
QUESTION 5According to the U.S. Supreme Court's 1945 ruling on Alcoa,
a. all monopolies are illegal
b. price fixing agreements are illegal under the rule of reason
c. small firms can be found to be in violation of the Sherman Antitrust Act
d. mere size is no offense.
e. possession of market power is sufficient for a firm to be found in violation of the Sherman Antitrust Act
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