For a Firm to Maximize Total Profits Through Price Discrimination,it

question 31

Multiple Choice

For a firm to maximize total profits through price discrimination,it should

• A)Charge a high price to consumers with an inelastic demand and low price to consumers with an elastic demand
• B)Charge a low price to consumers with an inelastic demand and high price to consumers with an elastic demand
• C)Charge the same price to both sets of consumers by maximizing at MR=MC on the elastic demand
• D)Charge the same price to both sets of consumers by maximizing at MR=MC on the inelastic demand

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Definitions:

Bondholders

Individuals or entities that hold debt securities issued by corporations or governments, representing a loan made by the bondholder to the issuer.

Premium

The amount paid for an insurance policy or the amount by which a bond or stock sells above its par value.

Interest Expense

The cost incurred by an entity for borrowed funds, representing the interest payable on any type of debt, including loans, bonds, or credit lines.

Discount

A reduction applied to the regular price of goods or services, or the difference between the nominal value of a financial instrument and its lower selling price.