Which of the Following Requirements Is Necessary to Practice Price

question 103

Multiple Choice

Which of the following requirements is necessary to practice price discrimination?
I. The firm must have market power.
II. The firm must be able to prevent arbitrage of its product.
III. The firm must face a perfectly elastic demand curve.
IV. The firm must operate in a perfectly competitive industry.

• A) II, III, and IV
• B) I, II, and III
• C) I and II
• D) III and IV

---

Definitions:

Revaluation

The process of adjusting the book value of an asset or liability to reflect its current fair market value.

Prospective Depreciation

Depreciation calculated from the current period forward, taking into account changes in asset value or estimated useful life.

Economic Benefits

Future returns or advantages from owning an asset or from a transaction.

Property, Plant and Equipment

Tangible assets that are held for use in the production or supply of goods and services, rental to others, or administrative purposes and are expected to be used during more than one financial period.