Author Question: Refer to Figure 16-2. Suppose Plato Playhouse price discriminates. Which of the following statements ... (Read 123 times)

renzo156 · **on:** Jun 29, 2018

Refer to Figure 16-2. Suppose Plato Playhouse price discriminates. Which of the following statements is true?

A) By charging two different prices, the theatre company has redistributed some profits from those who can pay higher prices to those who cannot, thereby increasing economic efficiency.
B) By charging two different prices, the theatre company essentially allows those willing to pay higher prices to subsidize those who are not.
C) Plato Playhouse will earn higher profits if it charges a single pricean average of the two prices instead of charging two different prices to the two different groups of customers.
D) By charging two different prices, the theatre company has redistributed some profits from those who can pay higher prices to those who cannot, thereby improving equity.

Question 2

Refer to Figure 11-11. The minimum efficient scale of output is reached at what rate of output?

A) 10,000 workers B) 10,000 picture frames
C) 20,000 picture frames D) 5,000 picture frames