Which of the Following Statements About Price Discrimination Is Correct

question 155

Multiple Choice

Which of the following statements about price discrimination is correct?

• A) A price discriminating firm will want to charge a higher price to the consumer group with the more inelastic demand.
• B) A firm will always be able to increase its profit by price discriminating rather than charging the same price to all customers.
• C) Price discrimination will be most effective when buyers can easily resell the product amongst themselves.
• D) Each consumer will pay a higher price when a firm is a price discriminator than would be the case if all customers were charged the same price.

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Definitions:

Predation

The ecological process by which one organism hunts and consumes another organism for sustenance.

Precautionary Principle

A safety principle requiring that an action or policy having the potential to cause harm to the public or to the environment should not be undertaken if the consequences are uncertain or potentially dangerous.

Environmental Protection

Efforts and policies aimed at conserving the natural environment and preventing further degradation due to human activity.