Suppose two countries, A and B, are at war with each other. Country A is very wealthy; country B is very poor. The XYZ Co produces tanks
Is XYZ able to set a different price for the tank sold to country A than the price for the tank sold to country B? Explain.
XYZ can practice multimarket price discrimination. There are two identifiable segments with different elasticities. Since the two countries are at war, resale is doubtful.
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Long-run macroeconomic equilibrium occurs when
A) aggregate demand equals short-run aggregate supply and they intersect at a point on the long-run aggregate supply curve. B) structural and frictional unemployment equals zero. C) aggregate demand equals short-run aggregate supply. D) output is above potential GDP.
Contractionary monetary policy will result in
A) higher interest rates. B) increased rates of inflation. C) a leftward shift in the long-run Phillips curve. D) an upward shift in the short-run Phillips curve.
The IS curve will shift to the right if:
a. the government deficit decreases. b. consumer confidence decreases. c. the MPC decreases. d. taxes decrease. e. the money supply increases.
Product differentiation that makes the product better than a rival's product from everyone's perspective
A. makes the rival's product obsolete. B. is known as horizontal differentiation. C. always increases welfare. D. is known as vertical differentiation.