An Important Lesson of Price Discrimination Is That

question 231

Multiple Choice

An important lesson of price discrimination is that:

• A) price discrimination will always lead to lower profits in one of the two markets.
• B) firms can increase profits by differentiating their product attributes.
• C) all firms can perfectly price discriminate.
• D) it only increases profits when the demand curves in two different markets are not the same.

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Definitions:

Authorized Shares

The highest amount of shares a company is allowed to distribute, as outlined in its charter.

Outstanding Shares

The total number of shares of a corporation that have been issued and are in the hands of the public and insiders.

Issued Shares

The total number of shares of stock that have been sold.

Generally Accepted Accounting Principles

A framework of accounting standards, principles, and procedures that companies must follow when compiling their financial statements in the U.S.