Despite the Gain from Higher Profits,firms Are Not Always Able

question 67

Multiple Choice

Despite the gain from higher profits,firms are not always able to price discriminate because

• A) they are unable to partition their customers into distinct groups.
• B) it is always illegal to price discriminate in the United States.
• C) they already hold a large degree of market power.
• D) they already provide their goods at the lowest-possible prices.
• E) they can easily determine each customer's reservation price.

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Definitions:

Cash Equivalents

Investments of a short duration that are highly liquid, easily converted into precise cash amounts, and carry a minimal risk of fluctuating in value.

Trading Securities

Financial assets bought and sold for short-term profit, often including stocks and bonds.

Fair Market Value

The price that property would sell for on the open market between an informed and willing buyer and seller.

Cost

The amount of money that is incurred in the production of goods or in providing services, which may include expenses related to materials, labor, and overhead.