A Firms Sells an Identical Product to Two Groups of Consumers

question 19

Multiple Choice

A firms sells an identical product to two groups of consumers, A and B. The firm has decided that ordinary price discrimination is feasible and wishes to set prices that maximize profits. Which of the following best describes the price and output strategy that will maximize profits?

• A)MRA = MRB = MC.
• B)(MRA - MRB)= (1 - MC).
• C)PA = PB = MC.
• D)MRA = MRB.

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Definitions:

Fixation Time

The amount of time spent looking at a visual stimulus.

Visual Stimulus

Any external object or event that is seen and which can influence a person's behavior or emotions.

Crystallized Intelligence

The ability to utilize acquired knowledge and experience.

Vocabulary

The set of words within a language that are familiar to an individual.