If Two Identifiable Markets Differ with Respect to Their Price

question 16

Multiple Choice

If two identifiable markets differ with respect to their price elasticity of demand and resale is impossible,a firm with market power will

• A) set a higher price in the market that is more price elastic.
• B) set a lower price in the market that is more price elastic.
• C) set price so as to equate the elasticity of demand across markets.
• D) set price equal to marginal cost in both markets.

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Definitions:

Paired-Difference T-Test

A statistical method used to compare two related or paired groups by analyzing the differences within each pair.

Wilcoxon Signed-Rank Test

A statistical test not based on parameter assumptions that is employed to evaluate two related samples, matched samples, or repeated observations within the same sample to determine if there is a difference in their population mean ranks.

Sample Sizes

Refers to the number of observations or data points collected in a sample from a population.

Normally Distributed

A probability distribution that is symmetric about the mean, showing that data near the mean are more frequent in occurrence than data far from the mean.