The economic incentive for third-degree price discrimination is based upon ________.
A. differences among sellers' costs
B. a desire to evade antitrust legislation
C. prejudices of business managers
D. differences among buyers' elasticities of demand
Answer: D
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A current account deficit can be good for a nation if the:
a. Balance of trade is positive. b. Nation is selling investment goods to the rest of the world. c. Nation is the recipient of foreign capital flows that have a positive contribution to the economy. d. Nation's reserve assets are falling.
A change in which of the following will change the optimal rate of output?
A. Property taxes. B. Inflation taxes. C. Profit taxes. D. Payroll taxes.
Regulators employ average cost pricing instead of marginal cost pricing because
A) average cost pricing is more efficient than marginal cost pricing. B) price must be high enough to cover all opportunity costs if the firm is to stay in business. C) the price is lower with average cost pricing. D) average cost pricing is simpler to compute than marginal cost pricing.
Which of the following are examples of tools used to reduce adverse selection?
A. dealer warranties B. universal health coverage C. lemon laws D. all of the above