Which of the Following Is NOT a Requirement for a Firm

question 228

Multiple Choice

Which of the following is NOT a requirement for a firm to be able to price discriminate?

• A) monopoly power
• B) groups of customers with different willingness to pay for the good
• C) economies of scale
• D) ability to keep the members of different customer groups separate
• E) ability to prevent resales of the product by customers

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Definitions:

Price-taker Industry

An industry in which individual firms have no control over the price of their product; they "take" the market price as given.

Long-run Equilibrium

A state in which all factors of production and costs are variable, and firms no longer have any incentives to enter or exit the market, resulting in an optimal allocation of resources.

Marginal Cost

The increase in cost resulting from the production of one additional unit of a good or service.