Which of the Following Statements About Price Discrimination Is True

question 44

Multiple Choice

Which of the following statements about price discrimination is true?

• A) It is always illegal in Canada
• B) Organizations can use cost differences as a defence against price discrimination charges
• C) Price elasticity of demand can justify price discrimination
• D) It is legal if it results in less competition

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Definitions:

Monopoly Power

The ability of a single company or entity to control and dominate an industry or market, limiting competition and potentially manipulating prices.

Perfectly-Elastic

Describes a situation where the quantity demanded or supplied responds infinitely to changes in price.

Marginal Revenue

The additional income earned from selling one more unit of a good or service.

Marginal Cost

The cost of producing one additional unit of a product or service, crucial for economic decision-making and pricing strategies.