Author Question: If price is equal to average variable cost, a perfectly competitive firm breaks even. Indicate ... (Read 97 times)

itsmyluck · **on:** Jun 29, 2018

If price is equal to average variable cost, a perfectly competitive firm breaks even.

Indicate whether the statement is true or false

Question 2

The Athenian Theatre sells tickets for the same play at different prices: a lower price to those who opt for the seats at the back of the theatre and a higher price for those who purchase seats in the front, around the stage.

Which of the following statements is true?
A) This is an example of product differentiation but not price discrimination.
B) Since the cost of producing the play does not change with the seating configuration, this is evidence of price discrimination based on market segmentation.
C) Charging two different prices is an effective way to avoid an excess demand for play tickets; the higher price lowers quantity demanded to some extent.
D) The theatre practices first-degree price discrimination by setting prices based on willingness to pay.

akudia · **Reply #1 on:** Jun 29, 2018

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