Price discrimination is the
A) refusal by a firm to sell to all customers.
B) selling of a given product at more than one price when the price differences reflect cost differences.
C) pricing of a product so that not everyone can afford it.
D) selling of a given product at more than one price when the price difference is unrelated to cost differences.
Answer: D
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Assume that the Clean Air Act requires an increase in sulfur dioxide (SO2) abatement (A) from 50 to 60 percent and that the relevant MSC (in millions) is MSC = 12 + 0.8A, where A is measured in percent. Then, the incremental cost of this policy change is
a. $20 million b. $60 million c. $560 million d. none of the above
The fundamental goal of economics is to
A. provide all people with five yachts and two automobiles. B. redistribute income and eliminate poverty. C. reduce unemployment so that welfare payments are not necessary. D. learn to handle the scarcity of virtually all resources.
In a perfectly competitive market, a permanent increase in demand initially brings a higher price, economic
A) loss, and entry into the market. B) loss, and exit from the market. C) profit, and entry into the market. D) profit, and exit from the market.
If everyone in an economy had equal income, the Lorenz curve would be a curve that intersects the line of income equality at the point at which 50 percent of the population earns 50 percent of the income
a. True b. False Indicate whether the statement is true or false