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    Principles of Microeconomics

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    Once again, more review questions stumping me. Any assistance would be great!

    Firms who are attempting to engage in price discrimination will offer customers with a ______demand a higher price and customers with a (an) _______ demand a lower price.

    a. lower; higher.

    b. normal; inferior.

    c. less elastic; more elastic.

    d. more elastic; less elastic.

    When a monopolist charges a low price to drive out competition, then charges a high price, the monopolist is engaging in:

    a. a trust agreement.

    b. a merger.

    c. duopoly pricing.

    d. predatory pricing

    Which of the following is most true about advertising?

    a. Advertising has costs but no benefits.

    b. There is no role for advertising for a firm in a perfectly competitive market.

    c. Firms should advertise at a level where marginal benefit exceeds marginal cost.

    d. Consumers are equally sensitive to advertising about all products

    When economies of scale are present, but are not sufficiently large to generate a natural monopoly, the expected market structure is:

    a. monopoly.

    b. monopolistic competition.

    c. perfect competition.

    d. oligopoly

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    Principles of Microeconomics is emphasized.

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