Which of the Following Is NOT a Necessary Condition for Price

question 100

Multiple Choice

Which of the following is NOT a necessary condition for price discrimination?

• A) Preventing resale of the product
• B) Downward sloping demand curve
• C) Separating markets for the good
• D) Having a constant marginal cost

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Definitions:

Risk-Averse

Refers to the preference of individuals or organizations to avoid risks and opt for the most certain outcome.

Risk Aversion

The preference to avoid uncertainty and risky situations, often influencing economic and financial decisions.

Adverse Selection

The case in which an individual knows more about the way things are than other people do. Adverse selection problems can lead to market problems: private information leads buyers to expect hidden problems in items offered for sale, leading to low prices and the best items being kept off the market.

Moral Hazard

The situation that can exist when an individual knows more about his or her own actions than other people do. This leads to a distortion of incentives to take care or to expend effort when someone else bears the costs of the lack of care or effort.