A Firm Sells Its Product to Two Groups of Buyers

question 31

Multiple Choice

A firm sells its product to two groups of buyers: daytime buyers and nighttime buyers.There are 50 daytime buyers,all of whom have identical demands given by D_D in the figure below.There are 50 nighttime buyers,all of whom have identical demands given by D_N in the figure below.The firm's variable costs are constant (SMC = AVC = $12) and its total fixed cost is $250,000.The marketing director must devise a two-part pricing plan that will maximize the firm's profit. A firm selling in two markets is practicing price discrimination

• A)anytime it charges different consumers different prices.
• B)when it is charging different consumers different prices and the price difference is not based upon cost differences.
• C)when it refuses to sell the good to some group of consumers.
• D)all of the above
• E)none of the above

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