Given That a Firm Can Divide Its Customers into Two

question 47

True/False

Given that a firm can divide its customers into two groups with different price elasticities of demand,a firm will charge a lower price to the group with the inelastic demand.

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Definitions:

VCR

A video cassette recorder, a device once commonly used to play and record television programs and movies on magnetic tape.

Perfect Substitutes

Goods or services that can be used in exactly the same way, thus one can completely replace another in consumption.

Marginal Rate of Substitution

The speed at which a consumer is prepared to exchange one product for another while keeping their overall satisfaction constant.

Utility Maximizing

The process or behavior of consumers attempting to get the greatest amount of satisfaction from their consumption choices, subject to their income and the prices of goods and services.