The Situation in Which a Firm Is Able to Charge

question 51

Multiple Choice

The situation in which a firm is able to charge the maximum price consumers are willing to pay for each unit of output the firm sells is referred to as:

• A)first-degree price discrimination.
• B)second-degree price discrimination.
• C)third-degree price discrimination.
• D)fourth-degree price discrimination.

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Definitions:

Consolidation Method

An accounting technique used by firms to combine the financial statements of subsidiaries with those of the parent company to present as one entity.

Equity Securities

Financial instruments like stocks that represent ownership interest in a company or rights to acquire such an interest.

Insignificant Influence

A situation where an investor does not have enough impact on a business to affect its decisions or policies.

Dividend Revenue

Income received from owning shares in a company which distributes a portion of its earnings to its shareholders.