Many Bars Close to Campuses Have Started Offering Cheaper Beer

question 33

Multiple Choice

Many bars close to campuses have started offering cheaper beer to consumers with a student ID.These bars

• A)Assume students have a inelastic demand curve
• B)Assume students have an elastic demand curve
• C)Are practicing price discrimination
• D)Both b and c

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Definitions:

Fixed Overhead

Costs that do not vary with production volume, such as rent, salaries, and insurance, required to operate a business regardless of production levels.

Variable Cost

Costs that change in proportion to the level of goods or services that a business produces.

Relevant Costs

Costs that are directly related to a specific management decision and that will change as a result of that decision.

Sunk Costs

Costs that have already been incurred and cannot be recovered, which should not affect future business decisions.