Which of the Following Must Exist for a Firm to Engage

question 308

Multiple Choice

Which of the following must exist for a firm to engage in price discrimination?

• A) The firm must be able to identify and separate its buyers into different classes, and the low-price buyers cannot resell the product to the high-price buyers.
• B) The firm must face an inelastic demand.
• C) The firm must be able to realize economies of scale.
• D) The firm must have no more than one class of buyer.
• E) The firm must be a natural monopoly.

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Definitions:

Balance Sheet

A balance sheet is a financial statement that provides a snapshot of a company's financial position, showing assets, liabilities, and equity at a specific point in time.

Deduction

An amount that is allowed to be subtracted from gross income in order to reduce taxable income, thus lowering the overall tax liability.

Direct Write-Off Method

An accounting method where uncollectible accounts receivable are written off directly against income at the time they are deemed uncollectible.

Uncollectible Accounts

Financial debts deemed unrecoverable from debtors that are often written off as bad debt expense.