The Following Graph Shows the Demands and Marginal Revenue in Two

question 44

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. At the optimal price and quantity,what is demand elasticity in each market?

• A)E₁ = -3.67,E₂ = -2.33
• B)E₁ = -3,E₂ = -4
• C)E₁ = -2.5,E₂ = -3.5
• D)E₁ = -3,E₂ =-3
• E)E₁ = -1.67,E₂ = -2.33

---

Definitions:

Bargain Purchases

Acquisitions where the purchase price is significantly less than the fair value of the identifiable net assets of the acquired company.

Accounting

The process of recording, classifying, summarizing, and interpreting financial transactions to provide useful information for decision-makers.

Consideration Transferred

Refers to the payment made by a buyer to acquire assets or services, which can include cash, assets, or other financial instruments.

Fair Value

An estimate of the price at which an asset or liability could be bought or sold in a current transaction between willing parties.