The conditions in which vertical relationships can enhance a firm's ability to price discriminate include
a. the manufacturer's product is of value to multiple types of customers
b. the costs of arbitraging the price difference across markets is large
c. the manufacturer acquires the distributer in the higher priced market
d. competition provides little ability for the manufacturer to price above marginal cost
a
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In a perfectly competitive market, the price in the long run:
A) will always be more than the minimum average total cost of the industry. B) will always be less than the minimum average total cost of the industry. C) will always equal the minimum average total cost of the industry. D) will always equal the average fixed cost of the industry.
The above figure shows three demand curves labeled D1, D2, and D3. Rank these three demand curves in terms of elasticity at a price of c
What will be an ideal response?
Cowboy Hat Markets Cody's Cowboy Hat Emporium has two stores Fort Worth, TX. One in the Stockyards area that caters to tourists and another a mile further north that caters to ranch hands. Why doesn't Cody sell to both customer types out of one store?
Consider the same monopoly situation as in the previous question. The deadweight loss associated with this monopoly is
a. 966 b. 1,058 c. 2,484 d. 3,680