Consumer surplus was therefore 27500 which is greater

Consumer surplus was therefore $27,500 , which is greater than the consumer surplus of
$21,875 with price discrimination. Although the total quantity is unchanged by price
discrimination , price discrimination has allowed EA to extract consumer surplus from
business passengers (Type B) who value travel most and have less elastic demand than
students.

Multiple Choice Questions
1) Which of the following strategies are used by business firms to capture consumer surplus?
2) Suppose a firm has market power and faces a downward sloping demand curve for its product,
and its marginal cost curve is upward sloping. If the firm reduces its price, then:
3) An electric power company uses block pricing for electricity sales. Block pricing is an
example of
4) A tennis pro charges $15 per hour for tennis lessons for children and $30 per hour for tennis
lessons for adults. The tennis pro is practicing
A) first-degree price discrimination.
B) second-degree price discrimination.
C) third-degree price discrimination.
D) fourth-degree price discrimination.
5) McDonald's restaurant located near the high school offered a Tuesday special for high school
students. If high school students showed their student ID cards, they would be given 50 cents off
any medium combination meal. This practice is an example of:

6) Some grocery stores are now offering customers coupons which entitle them to a discount on
certain items on their next visit when they go through the check-out line. This practice is an
example of: