Question

1.Which of the following are key results of price discrimination? A. Profits increase and consumer surplus increases. B. Profits descrease and consumer surplus decreases. C. Profits decrease and consumer surplus increases. D. Profits increase and consumer surplus decreases.

2.Children are charged less than adults for admission to professional baseball games but are charged the same prices as adults at the concession stands. This pricing system occurs because: A. children have an elastic demand for game ticket but an inelastic demand for concession items. B. the seller can prevent children from buying game tickets for adults but cannot prevent children from buying concession items for adults. C. children can personally "consume" only a single game ticket, but can personally consume more than one concession item. D. children have an inelastic demand for game tickets but an elastic demand for concession items.

Answer 1

a) Price discrimination tends to transfer the consumer surplus to the producer surplus and increase the profit. the answer is "A".

b) "A"

A lower price will be charged where the demand is elastic that will increase the revenue in the market and a higher price will be charged in the inelastic market that will increase the revenue there. Answer is "A".