When a Firm Uses Third-Degree Price Discrimination, the Group of Consumers

question 116

Multiple Choice

When a firm uses third-degree price discrimination, the group of consumers with _____ demand would face the highest prices.

• A) high elasticity of
• B) low elasticity of
• C) perfectly elastic
• D) unitary elastic

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Definitions:

Operating Cost

Expenses associated with the day-to-day functions of a business excluding cost of goods sold, such as rent, utilities, and payroll.

Value-Based Pricing

A pricing strategy where the price of a product or service is determined based on the perceived value to the customer rather than the cost of production.

Required Return

The minimum expected return by investors for investing in a particular security or project, reflecting the risk level.

Investment

The allocation of resources, such as capital, time, or assets, with the expectation of receiving future benefits or returns.