Price discrimination is related to elasticity because:
A. the firm can increase revenues by charging customers with elastic demands higher prices and charging customers with inelastic demands lower prices.
B. the firm can increase revenues by charging customers with elastic demands lower prices and charging customers with inelastic demands higher prices.
C. the firm can increase revenues by charging all customers higher prices.
D. None of these; elasticity and price discrimination are unrelated.
Answer: B
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Refer to Figure 4-6. What area represents the deadweight loss at P2?
A) G + H B) C + E C) B + C D) C + E + H
In the 1980s, expansionary fiscal policy is believed to have crowded out
A) domestic investment as interest rates rose. B) exports and imports as interest rates rose. C) exports but not domestic investment as interest rates rose. D) domestic investment as interest rates fell.
Contractionary fiscal policies used to reduce the deficit in the 1990s did not hurt the economy because fiscal and monetary policies were well coordinated at that time
a. True b. False Indicate whether the statement is true or false
Suppose there are only two firms that pollute, A and B, and each emits 10 tons of waste into the air. Firm A can reduce its pollution at a cost of $100 per ton, and Firm B can reduce its pollution at a cost of $500 per ton. Each has been given an emission credit that allows it to pollute 6 tons. If firms maximize profits, what will happen?
A. Each firm will clean up 4 tons and pollute 6 tons. B. Firm B will buy one credit from A; it will cut pollution to 7 tons, and firm A will cut it to 5 tons. C. Firm A will buy four credits from B; A will emit 10 tons, and B 2 tons. D. Firm B will buy four credits from A; B will emit 10 tons, and A 2 tons.