Why do companies practice price discrimination?
(A) Price discrimination recognizes that groups of consumers are willing and able to pay different amounts for a good.
(B) Price discrimination allows companies to defend an illegal monopoly against free market competition.
(C) Price discrimination enables companies to charge all consumers the same price for a good or service.
(D) Price discrimination provides individual producers with an advantage in perfectly competitive markets.
Ans: (A) Price discrimination recognizes that groups of consumers are willing and able to pay different amounts for a good.
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Which of the following statements most accurately describes the task of bank asset management?
A) Banks seek the highest returns possible subject to minimizing risk and making adequate provisions for liquidity. B) Banks seek to have the highest liquidity possible subject to earning a positive rate of return on their operations. C) Banks seek to prevent bank failure at all cost; since a failed bank earns no profit, liquidity needs supersede the desire for profits. D) Banks seek to acquire funds in the least costly way.
In the presence of the crowding out effect, the purchase of Treasury bonds by the government will result in:
a. an increase in the interest rates. b. a decrease in the price of bonds. c. a decline in the private sector spending. d. an increase in the private sector spending. e. a decrease in the rate of inflation.
The largest component of the M1 definition of the money supply is currency
Indicate whether the statement is true or false
"Anticompetitive practices" are actions by a powerful firm that:
a. threaten to destroy competitors b. force competitors to compete less vigorously c. prevent the entry of new rivals. d. all of these are true.