True or False? Why?
- Two part tariffs always involve setting the price per unit above marginal cost.
- If a monopolist is able to set different prices based on observable characteristics of its customers the firm will set the higher price in the market where demand is more elastic.
- If a monopolist is able to price discriminate it will also be the case that marginal cost is different in each market.
- Price discrimination increases the deadweight loss over that in monopolized markets where there is just one price.
- Given that price discrimination results in different prices being set in different markets served by a monopolist marginal revenue will be different in each market as well.
- Monopolists may choose not to price discriminate even if they are able to do so.
- In a Cournot duopoly market the equilibrium output choices of each firm is not a Nash equilibrium given that firms are choosing profit maximizing strategies.
- Firms set different output prices if they are engaging in Betrand competition.
- Oligopoly deadweight losses are greater than those for single price monopolists if marginal cost and demand is the same in both markets.
- As the number of identical firms in a market characterized by oligopoly increases the price will converge to that in a perfectly competitive industry.
- Mergers that lower marginal cost can simultaneously increase price and lower deadweight loss.
- Collusion between firms usually results in lower prices but higher profits for the firms engaging in the collusive behaviour.
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