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Firms engage in legal price discrimination if they
Cost Structure
The composition of a company’s costs, including the ratio of fixed to variable costs and how these affect overall profitability.
Fixed Costs
Regardless of production or sales volumes, certain costs, like rent, salaries, and insurance, do not vary.
Variable Costs
Costs that vary directly with the level of production or sales volume, such as raw materials and direct labor.
Profit and Loss Statement
A financial statement that summarizes the revenues, costs, and expenses incurred during a specific period, typically a fiscal quarter or year.
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