Refer to the Following Figure

question 39

Multiple Choice

Refer to the following figure:

The 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 your answers to the previous two questions demonstrate 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:

Service Productivity

The measure of output generated by a service sector entity relative to the input of resources like labor and capital.

Mass Customization

Mass customization is a manufacturing and marketing technique that combines the flexibility and personalization of custom-made products with the low unit costs associated with mass production.

Self-Service

A business model or service design that allows customers to perform services for themselves without direct assistance from employees.