If Price Discrimination Occurs in a Market

question 3

Multiple Choice

If price discrimination occurs in a market,

• A)the law of one price does not hold.
• B)the firm earns arbitrage profits.
• C)consumers whose demand for the product sold is more elastic pay higher prices than consumers whose demand is less elastic.
• D)the marginal cost of production is constant.

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Definitions:

Motor Skills

the abilities required to perform movements and tasks, involving the coordination between the brain and muscles.

Significance Level

A statistical measure that determines the threshold at which a null hypothesis is rejected, commonly set at 0.05 or 5%.

Gas Price

The cost per unit volume of gasoline, which can vary based on location, supply, and demand factors.

Significance Level

The threshold at which a hypothesis test concludes a result is statistically significant, typically denoted by alpha (α).