Which of the Following Statements Regarding Price Discrimination Is False

question 70

Multiple Choice

Which of the following statements regarding price discrimination is false?

• A)In order to capture more surplus, the firm must have some market power.
• B)The firm must have some information about the different amounts people will pay for the product.
• C)The firm must be able to prevent resale.
• D)The firm must be able accurately forecast total sales.

---

Definitions:

Strike Price

The fixed price specified in an options contract at which the holder can buy or sell the underlying asset.

Black-Scholes Model

A mathematical model used for pricing European-style options, estimating the variation over time of financial instruments.

Call Option

A deal in the financial industry that bestows upon the buyer the latitude, but exempts them from the necessity, to acquire stocks, bonds, commodities, or other assets at a price fixed in advance, within a predetermined time frame.

Warrants

Financial instruments that give the holder the right, but not the obligation, to buy a company's stock at a specific price before a specified date.