The Following Graph Shows the Demands and Marginal Revenue in Two

question 24

Multiple Choice

The following graph shows the demands and marginal revenue in two markets,1 and 2,for a price discriminating firm along with total marginal revenue,MR_T,and marginal cost. What rule do you follow for price determination for a firm that practices price discrimination?

• A)elasticity and price are not related
• B)price is lower in the higher elasticity market
• C)price is higher in the higher elasticity market
• D)profit is maximized when both prices and elasticities are equal
• E)none of the above

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Definitions:

Phonology

Phonology is the study of how sounds are organized and used in natural languages.

Phonetics

The study of speech sounds.

Phrenology

The idea (now discredited) that psychological strengths and weaknesses could be precisely correlated to the relative sizes of different brain areas.

Linguistic Performance

The observable use of language in communication; how well an individual can produce spoken or written language in real-life situations.