Refer to the Following Figure

question 34

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

• A) E₁ =-3.67, E₂ = -2.33
• B) E₁ =-03, E₂ = -4
• C) E₁ = -2.5, E₂ = -3.5
• D) E₁ = -3, E₂ = -3
• E) E₁ = -1.67, E₂ = -2.33

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Definitions:

Export Promotion Strategy

A governmental or organizational policy aimed at encouraging and supporting firms to sell their products or services abroad.

Comparative Advantage

The ability of an entity to produce a good or offer a service at a lower opportunity cost than its competitors, leading to more efficient trading opportunities.

User Fees

Charges levied for the use of a particular service or facility, often imposed by governments or businesses.

Elasticities

Measures of how much the quantity demanded or supplied of a good responds to changes in price, income, or other factors, indicating the sensitivity of demand or supply to changes.