Which of the following is NOT a condition for price discrimination to exist?
A. unpatented product or the service
B. identification of buyers with differing elasticities
C. downward sloping demand curve faced by the firm
D. ability to prevent the resale of the product or service
Answer: A
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Who is likely to earn a higher income, dentists or dental hygienists, and why?
a. dental hygienists because their education is less costly b. dentists because their education is less costly c. dental hygienists because their education is more costly d. dentists because their education is more costly e. neither; they usually earn the same wage rate
An oligopolist decides to lower its price to capture a greater market share. This sets off a price war with its rivals, and the price moves from P 1 to P 2 and so forth. What is the ultimate outcome if this price war continues?
a. The final price equals the ATC, and economic profits become zero.
b. The final price reflects the benefits of collusion between the firms.
c. Without collusion the firms are able to charge a higher price than before.
d. The final price exceeds the ATC, and economic profits are earned.
The point where the budget constraint and an indifference curve are tangent
A. Indicates profit maximization. B. Represents the optimal consumption point. C. Represents maximum total revenue. D. Indicates the optimal level of production.
The core inflation rate excludes
A. Only energy prices for the airlines. B. Food and energy prices. C. Import prices. D. Entertainment and packaging prices.