Why is it important that a firm can prevent resale of its product if it wishes to engage in price discrimination?
What will be an ideal response?
If the firm cannot prevent resale then consumers who are able to purchase the product at the lower price can do so and resell the product to the consumers to whom the firm will charge the higher price. This will prevent the firm from earning higher profits from price discrimination than from a single pricing strategy, since the single price will be higher than the lowest price charged with a price discrimination strategy.
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Everything else held constant, an increase in net taxes will cause the IS curve to shift to the ________ and aggregate demand will ________
A) right; increase B) right; decrease C) left; increase D) left; decrease
One goal of rate-of-return regulation is the prevention of
A) free market entry. B) positive economic profits. C) poor quality service. D) environmental degradation.
The rate of return on an investment in medical education
a. is inversely related to the length of time spent in formal schooling. b. is inversely related to income. c. will increase with an increase in the availability of student loans. d. is much higher than the rate of return on an undergraduate business degree. e. is inversely related to the number of years in the profession.
Persistent high inflation combined with high unemployment in an economy is known as _____
a. disinflation b. stagflation c. hyperinflation d. demand-pull inflation