Which of the Following Is Not a Necessary Condition for Effective

question 26

Multiple Choice

Which of the following is not a necessary condition for effective price discrimination?

• A) The seller must be able to separate buyers based on their elasticities.
• B) The seller must not be a price taker.
• C) Consumers must not be able to resell the products to other consumers.
• D) Consumers must tell the seller how much they are willing to pay for the product.

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Definitions:

Economies of Scale

Cost benefits that companies gain from their operation size, where the cost for each unit of production typically falls as the scale expands.

Constant Returns to Scale

A situation in production where increasing all inputs by a certain factor results in output increasing by the same factor.

Average Total Cost

The total cost divided by the quantity of output produced; it includes all variable and fixed costs.

Minimum Efficient Scale

The smallest scale of production at which long-run average total costs are minimized.