A Firm Sells an Identical Product to Two Groups of Consumers,A

question 21

Multiple Choice

A firm sells an identical product to two groups of consumers,A and B.The firm has decided that third-degree price discrimination is feasible and wishes to set prices that maximize profits.Which of the following best describes the price and output strategy that will maximize profits?

• A)PA = PB = MC.
• B)MRA = MRB.
• C)MRA = MRB = MC.
• D)(MRA - MRB)= (1 - MC).

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Definitions:

Filed

The act of submitting documents officially to a designated authority or office for the purpose of record-keeping and review.

Perfection Method

Legal procedures used to establish a secured party's rights in a collateral against third parties, especially in bankruptcy.

Deposit Account

A bank account that allows the holder to deposit and withdraw money, including savings accounts, checking accounts, and money market accounts.

Control

The power or authority to manage, direct, or influence something or someone.