Which of the Following Are Issues That Must Be Dealt

question 84

Multiple Choice

Which of the following are issues that must be dealt with in order for differential pricing to be effective?

• A) The firm must differentiate between the market segments and structure its pricing to make one segment pay more than the other.
• B) The firm must control demand such that the lower paying segment does not utilize the entire availability of the asset.
• C) The firm must secure enough capacity to meet demand from each segment.
• D) A and B only

---

Definitions:

Producer Surplus

The difference between what producers are willing to sell a good for and the actual price they receive, representing the benefit to producers.

Binding Price Ceiling

A government-imposed price limit on how high a price can be charged for a product or service, set below the market equilibrium, causing shortages.

Producer Surplus

The difference between what producers are willing to sell a good for and the actual market price they receive, essentially the profit producers earn from selling a good.

Consumer Surplus

The variance in the sum total consumers are enthusiastic and financially able to spend on a good or service versus what they end up paying.