Price Discrimination Is More Common in Service Industries Because

question 116

Multiple Choice

Price discrimination is more common in service industries because

• A) low-price buyers will find it virtually impossible to resell the products of such industries to high-price buyers.
• B) the costs of providing such industries' products to different groups of buyers vary dramatically.
• C) the price elasticity of demand is the same for all groups of buyers in these industries.
• D) all firms in these industries have significant monopoly power over price.

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Definitions:

Net Income

The profit a company makes after subtracting all its costs and expenses from its total revenues.

Prepaid Insurance

An asset account that represents the amount of insurance premium payments made in advance and has not yet expired at the balance sheet date.

Prepaid Rent

An expense that is paid in advance for the use of property or equipment, which is then recognized as an expense over the period of use.

Rent Expense

The cost incurred from renting property or equipment, recognized as an expense on the income statement.