​A Firm Practicing Direct Price Discrimination Will Charge a Higher

question 66

Multiple Choice

​A firm practicing direct price discrimination will charge a higher price to

• A)​Consumers known to have an elastic demand
• B)All consumers
• C)Consumers known to have an inelastic demand
• D)​Consumers known to have a unitary elastic demand

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Definitions:

Average Cost

The total cost of production divided by the number of goods produced, synonymous with average total cost, indicating the cost on a per unit basis.

Long-run Equilibrium

A state in which all factors of production are fully adjustable, allowing firms to enter or exit the industry, resulting in no economic profit for firms in perfectly competitive markets.

Marginal Cost

The cost addition of manufacturing an extra item of a particular product, emphasizing its role in decision-making for production levels.

Purely Competitive

A market structure characterized by many buyers and sellers, where each seller has little to no influence on the market price.