Pharmaceuticals with High Fixed Costs Can Benefit with Thepractice of Price

question 122

Multiple Choice

Pharmaceuticals with high fixed costs can benefit with thepractice of price discrimination because:

• A)high fixed costs create incentive for pharmaceuticals to sell more.
• B)charging different prices to different customers generates different levels of fixed costs.
• C)profit from customers paying high prices allows pharmaceuticals to cover part of the fixed costs.
• D)extra profit from customers paying low prices allows pharmaceuticals to cover part of the fixed costs.(True Answer
• )Correct

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Definitions:

Infinity

A concept in mathematics denoting something without any limit, often represented by the symbol ∞.

Linear Relationship

Relationship between variables appropriately represented by a straight line.

Yerkes-Dodson Law

A theory suggesting that there is an optimal level of arousal for the best performance on any task; too little or too much arousal can impair performance.

Arousal

A physiological and psychological state of being awake or reactive to stimuli.