Which of the Following Is a Reason Why a Firm

question 95

Multiple Choice

Which of the following is a reason why a firm would not engage in price discrimination?

• A)Price discrimination is illegal in some western states and the owners of firms in these states face civil or criminal prosecution if they engage in price discrimination.
• B)Some firms are not able to segment the market for the products they sell.
• C)Some firms do not want to violate the law of one price.
• D)The transactions costs associated with selling the product exceed the price of the product.

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Definitions:

Total Revenues

The overall amount of money generated by a business from its normal business operations.

Total Costs

The complete amount of money spent by a business for producing or acquiring goods or services, including both fixed and variable costs.

Economic Profits

Economic profits are the financial gains that exceed the total costs of production, including both explicit and opportunity costs, indicating an above-normal return.

Average Fixed Cost

The fixed costs of production divided by the quantity of output produced; it decreases as production increases.