Which of the following conditions must be TRUE so that a firm can price discriminate?
A) There are no other firms in the market.
B) The good is a nondurable.
C) The good cannot be easily resold.
D) All of the above.
C
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Both the perfectly competitive firm and the monopolistically competitive firm produce at the output where marginal revenue equals marginal cost (MR = MC) but only the perfectly competitive firm achieves allocative efficiency
Explain why this is the case.
In the article on China holding $4 trillion in dollars, for every dollar it holds in reserves, it prints
A. 6.5 fewer yuan for the domestic money supply. B. 10 fewer yuan for the domestic money supply. C. 6.5 additional yuan for the domestic money supply. D. 10 additional yuan for the domestic money supply.
In monopolistic competition, why would a firm avoid increasing output to lower its average total cost?
a. Marginal revenue would increase above the total cost of the increased output. b. Marginal revenue would fall below the total cost of the total output. c. Total revenue would increase above total cost for the total output. d. Marginal revenue would fall below the marginal cost of the increased output.
Fee-for-service insurance
A. requires you pay for services before they are performed. B. has more meddlesome bureaucrats than an HMO. C. is typically more expensive than an HMO covering the same illnesses. D. does not allow patients to pick their own doctor.