A school bookstore tried to engage in price discrimination by selling novels to students and faculty for different prices. Its strategy was to increase prices to faculty and decrease prices to students. What is the most likely reason that this strategy failed?
A. Novels are sold in a competitive market.
B. There was nothing to prevent students from purchasing novels and reselling them to faculty.
C. Everyone had inelastic demand for novels.
D. There was no easy way to distinguish the students from the faculty.
Answer: B
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The PIA is generated with a formula such that
A. high-income earners receive the same as low-income earners. B. high-income earners receive less than low-income earners. C. higher-income earners receive more money but a lower proportion of their AIME than lower-income. D. higher-income earners receive the same proportion of AIMA as low-income earners.
Starting from long-run equilibrium, a decrease in autonomous investment results in ________ output in the short run and ________ output in the long run.
A. lower; potential B. higher; higher C. higher; potential D. lower; higher
Long-run economic rent or profit do not exist for fixed factors like land because
A) bidding drives up the price of the factor until no economic rent exists. B) there is no market for such factors. C) these factors have L-shaped isoquants. D) these factors will earn economic profits.
The more liquid markets are the:
A. lower the interest rates, and the higher the amount of investment. B. lower the interest rates, and the lower the amount of investment. C. higher the interest rates, and the higher the amount of investment. D. higher the interest rates, and the lower the amount of investment.