Which of the Following Is Not a Requirement for a Successful

question 114

Multiple Choice

Which of the following is not a requirement for a successful price discrimination strategy?

• A)A firm must have the ability to charge a price greater than marginal cost.
• B)Some consumers must have a greater willingness to pay for the product than other consumers, and the firm must be able to know what prices consumers are willing to pay.
• C)The firm must be able to prevent arbitrage.
• D)Transactions costs must be the same for all consumers.

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Definitions:

Lease Payments

Regular payments made by a lessee to a lessor for the use of an asset.

Cost of Funds

The interest rate that financial institutions pay for the use of money or funds they lend out to borrowers.

Principal

Principal refers to the original sum of money borrowed in a loan or invested, exclusive of any interest or dividends.

Annual Payments

Periodic payments made once every year, often used in terms of loans, insurance, and investments.