To practice price discrimination, a firm:
a. must face a relatively elastic demand curve.
b. must have customers with different elasticities of demand.
c. must not be able to distinguish between customers based on elasticities of demand.
d. must not be able to prevent resale of the product.
e. must be a price taker.
b
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Suppose that there is a negative aggregate demand shock and the central bank commits to an inflation rate target. But if the commitment is not credible, then
A) the public's expected inflation will remain unchanged. B) the short-run aggregate supply curve will rise. C) economic contraction will be worse. D) all of the above. E) both B and C.
Assume that there is a surplus in the market for hybrid automobiles. Which of the following statements correctly describes this situation?
A) The supply of hybrid automobiles is greater than the demand for hybrid automobiles. B) Some consumers will be unable to obtain hybrid automobiles at the market price and will have an incentive to offer to buy the product at a higher price. C) The price of hybrid automobiles will fall in response to the surplus; as the price falls the quantity demanded will increase and the quantity supplied will decrease. D) The surplus will cause an increase in the equilibrium price of hybrid automobiles.
Suppose a firm has a variable cost function VC = 20Q with avoidable fixed cost of $50,000. What is the firm's average cost function?
A. AC = 50,000 + 20Q B. AC = (50,000/Q) + 20 C. AC = 50,000 + 40Q D. AC = 20
The central reason why there are gains from international trade is because a. trading allows otherwise unemployed people to have jobs
b. the rate of interest is not the same in all countries. c. resources are not equally distributed to all nations. d. those nations with absolute advantages in producing many goods can produce all of those goods at lower opportunity costs than other countries.