You Currently Sell the Same Product to Both Professional Plumbers

question 157

Multiple Choice

You currently sell the same product to both professional plumbers and homeowners, and are able to prevent transfer from one group to the other. Your current prices, quantities sold, and the absolute values of the slopes of the demand curves are as follows: Price Number sold Slope of demand curve Plumbers $20 30 0.75
Homeowners $20 10 0.50
If your marginal cost is $10 and you are interested in maximizing your revenues, how would you adjust your prices?

• A)Increase plumbersʹ price and decrease homeownersʹ price.
• B)Decrease plumbersʹ price and increase homeownersʹ price.
• C)Increase prices for both groups.
• D)Decrease prices for both groups.

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Definitions:

Indubitable Equivalent

A term in bankruptcy law referring to a replacement of collateral that is unquestionably equal in value to the original collateral.

Granted A Discharge

The release of a debtor from the obligation to repay his or her debts, typically occurring at the conclusion of a bankruptcy case.

Liquidation Proceeding

A legal process in which a company's assets are distributed to claimants, conducted when the company is insolvent and unable to meet its debt obligations.

Priority Claims

Claims in bankruptcy that are given precedence over other debts, often due to their importance like wage or tax claims.