contestable market

In a contestable market

• there must be lots of firms

• there must be a few firms or more

• there can be any number of firms

Gym membership at Jim's Gym are priced as following

Adult: £18

65 & Over: £13

18 – 24: £10

What type of price discrimination does this gym use?

• first

• third

• second

• fourth

There is a condition for hit-and-run competition to be able to take place choose the answer you think makes the most sense:

• Supernormal profits earned must be greater than entry and exit costs.

• Supernormal profits must equal entry and exit costs.

• Supernormal profits earned must be smaller than entry and exit costs.

• Profits should not exceed the normal profit making level.

Price discrimination is defined as a business charging different consumers ... prices for the ... product, whereby the price difference is not due to the differences in the cost of supplying the customers.

• different …same

• same …same

• same...different

• different …different

Price discrimination is not possible under

• Perfect competition

• Monopoly

• Oligopoly

• Monopolistic Competition

A grocery store that offers one can of soup for $0.35 and three cans for $1.00 is engaging in

• 1st degree

• 2nd degree

• 3rd degree

Reducing fares for bus travel for over 60's is a form of price discrimination.

• First degree price discrimination

• Second degree price discrimination

• Third degree price discrimination

An electricity company charging a higher price for the first 100 units used per month and lower price for all other electricity consumed on top of the 100 units is a form of...

• First degree price discrimination

• Second degree price discrimination

• Third degree price discrimination

A firm with market power engages in price discrimination to:

• earn a higher profit
  
• increase consumer surplus
  
• decrease deadweight loss
  
• make its demand more elastic 

Compared to a perfectly competitive industry with the same demand and cost curves, a monopoly’s price and quantity will be which of the following? 

• P=Higher; Q=Same
• P=Lower; Q=Same
• P=Lower; Q=Higher
• P=Higher; Q=Lower