G-202 EXAM TWO CERTIFICATION
EVALUATION 2026 QUESTIONS WITH
ANSWERS GRADED A+
●● Explain how this differs from a firm with no market power under
perfect competition.
Answer: Charge the same market clearing price determined by industry
demand and industry supply. Increases profit by reducing marginal cost
and shifting to a lower point on the industry supply schedule. Is socially
efficient.
●● Additionally, recognize how to identify the social welfare
maximizing price and quantity and understand why they are different
than the profit-maximizing price and quantity under imperfect
competition.
Answer: IDK
●● *Given fixed cost and constant marginal cost, know how to calculate
revenue, total cost, and profit.*
Answer: IDK
●● Comprehend the difference between how a firm with market power
determines the price to charge a consumer under perfect and imperfect
price discrimination.
, Answer: Perfect price discrimination: firm charges every consumer their
individual MWTP which is the same as MB.
Imperfect price discrimination: firm charges different prices to discrete
groups of consumers based upon discrete differences in WTP for the
same product.
●● Understand the difference in impact on consumer surplus between
perfect and imperfect price discrimination.
Answer: Perfect price discrimination: Each consumer breaks even
economically (net economic benefit is 0), which means all SW is
captured as PS and thus CS is 0.
Imperfect price discrimination: Because the firm cannot perfectly price
discriminate, consumers capture some surplus, but total output Q1 is
socially inefficient, and the total loss in SW is the area of the shaded
triangle. The higher number of groups the firm price discriminates
across; the closer total output comes to its socially efficient level. Total
CS falls, total PS rises, and SW represented by the shaded triangle gets
smaller.
●● Given fixed cost and constant marginal cost, know how to calculate
revenue, total cost, profit, and social welfare in a case of perfect price
discrimination.
Answer: IDK
●● Contrast the strategic focus of a firm (with no market power unable
to differentiate their product) seeking to increase profit in a perfectly
EVALUATION 2026 QUESTIONS WITH
ANSWERS GRADED A+
●● Explain how this differs from a firm with no market power under
perfect competition.
Answer: Charge the same market clearing price determined by industry
demand and industry supply. Increases profit by reducing marginal cost
and shifting to a lower point on the industry supply schedule. Is socially
efficient.
●● Additionally, recognize how to identify the social welfare
maximizing price and quantity and understand why they are different
than the profit-maximizing price and quantity under imperfect
competition.
Answer: IDK
●● *Given fixed cost and constant marginal cost, know how to calculate
revenue, total cost, and profit.*
Answer: IDK
●● Comprehend the difference between how a firm with market power
determines the price to charge a consumer under perfect and imperfect
price discrimination.
, Answer: Perfect price discrimination: firm charges every consumer their
individual MWTP which is the same as MB.
Imperfect price discrimination: firm charges different prices to discrete
groups of consumers based upon discrete differences in WTP for the
same product.
●● Understand the difference in impact on consumer surplus between
perfect and imperfect price discrimination.
Answer: Perfect price discrimination: Each consumer breaks even
economically (net economic benefit is 0), which means all SW is
captured as PS and thus CS is 0.
Imperfect price discrimination: Because the firm cannot perfectly price
discriminate, consumers capture some surplus, but total output Q1 is
socially inefficient, and the total loss in SW is the area of the shaded
triangle. The higher number of groups the firm price discriminates
across; the closer total output comes to its socially efficient level. Total
CS falls, total PS rises, and SW represented by the shaded triangle gets
smaller.
●● Given fixed cost and constant marginal cost, know how to calculate
revenue, total cost, profit, and social welfare in a case of perfect price
discrimination.
Answer: IDK
●● Contrast the strategic focus of a firm (with no market power unable
to differentiate their product) seeking to increase profit in a perfectly
