When a Firm Is Practicing Price Discrimination in Two Markets

question 49

Multiple Choice

When a firm is practicing price discrimination in two markets, the profit maximizing condition is met at:

• A) MR_F = MC_F + MC_T
• B) MR_F = MC_F - MC_T
• C) MR_A = MR_B = SMC.
• D) MR_A + MR_B = SMC.
• E) MR_A - MR_B = SMC.

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Definitions:

Phrenology

A now-discredited theory which postulated that bumps on the skull could predict mental traits and character.

Myelin Sheath

A fatty tissue layer segmentally encasing the axons of some neurons; enables vastly greater transmission speed as neural impulses hop from one node to the next.

Synaptic Gaps

The tiny spaces between neurons, across which neurotransmitters travel to transmit messages from one neuron to another.

Biological Psychologist

A scientist who specializes in studying the biological underpinnings of behavior and mental processes, often examining the brain and nervous system.