How Does Price Discrimination Help Us Understand How Many Markets

question 15

Multiple Choice

How does price discrimination help us understand how many markets actually function?

• A) All firms will practice price discrimination unless a government prohibits the practice.
• B) Monopolistic competition is rare,so economists are able to focus in on the few firms that engage in the practice.
• C) Instances of perfectly competitive markets and monopoly are rare.
• D) Antidiscrimination laws are widespread,so models explaining price discrimination help us better understand markets that we are unable to witness.
• E) Monopolistic competition is the most common market form,but it is the only one that does not engage in price discrimination.

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Definitions:

Test Marketing

A trial mini-launch of a product in limited areas that represent the potential market.

Potential Market

The entire market universe that could potentially buy a product or service, considering all possible customers who fall within a segment.