Why would we be likely to observe dentists engaging in price discrimination?
a. Dental care is expensive.
b. All dentists are basically alike.
c. It is very important to exercise care in choosing a dentist.
d. It is nearly impossible to resell the services of a dentist.
e. The demand for dentists is very inelastic.
QUESTION 2When ruling on a price-fixing case under the per se rule, the U.S. courts need only examine
a. market structure
b. market conduct
c. market performance
d. market structure and conduct
e. market structure, conduct, and performance
QUESTION 3A horizontal long-run industry supply curve occurs under conditions of
a. economies of scale
b. diseconomies of scale
c. monopoly
d. increasing costs
e. constant costs
QUESTION 4Which of the following is not necessary in order for a firm to engage in price discrimination?
a. The producer must face an inelastic demand curve.
b. The producer must face a downward-sloping demand curve.
c. There must be at least two identifiable classes of consumers with different price elasticities of demand.
d. The producer must be able, at little cost, to distinguish between the different classes of buyers.
e. It must be impossible for one buyer to resell to another.
QUESTION 5Which of the following would not violate the Sherman Antitrust Act if the rule of reason was used to interpret the act?
a. conspiring to monopolize
b. formation of a trust company
c. conspiring to restrain trade
d. a single firm supplying all of a market with no close substitutes and some barriers to entry
e. attempting to restrain trade with a foreign nation
QUESTION 6A constant-cost industry is one
a. that faces constant average costs in the short run
b. that experiences economies of scale
c. that experiences stable demand
d. whose cost curves do not change as new firms enter
e. that faces increasing resource prices as new firms enter
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