Use the Information Below to Answer the Following Questions

question 35

Multiple Choice

Use the information below to answer the following questions.
Fact 13.1.1
The following statements give some information about seven markets.
1. Coca-Cola cuts its price below that of Pepsi-Cola in an attempt to increase its market share.
2. A single firm, protected by a barrier to entry, produces a personal service that has no close substitutes.
3. A barrier to entry exists, but the good has some close substitutes.
4. A firm offers discounts to students and seniors.
5. A firm can sell any quantity it chooses at the going price.
6. The government issues Nike an exclusive licence to produce golf balls.
7. A firm experiences economies of scale even when it produces the quantity that meets the entire market demand.
-Refer to Fact 13.1.1. The firm described in ________ can price discriminate if it can ________.

• A)statements 2, 3, 6, and 7; eliminate the barriers to entry
• B)statements 2, 3, 6, and 7; distinguish between different classes of consumers
• C)statements 2 and 3; eliminate the current barriers to entry
• D)statement 1; increase advertising
• E)statement 1; decrease its costs

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Definitions:

Icon

A mental representation of a visual stimulus that is held briefly in sensory memory.

Proactive Interference

The phenomenon where older memories interfere with the recall of newer memories.

Racquetball

A fast-paced sport played with a small rubber ball and a racquet in an indoor court by two or four players.

Semantic Memory

A type of long-term memory that involves the capacity to recall words, concepts, or numbers, which is essential for the understanding and use of language.