Suppose Group Price Discrimination Is Possible; However,a Firm Sets the Same

question 61

Multiple Choice

Suppose group price discrimination is possible; however,a firm sets the same price in each market.As a result,

• A) price elasticity of demand is the same in each market.
• B) the price-inelastic market will buy zero units.
• C) marginal revenue in the more price-elastic market exceeds marginal revenue in the less price-elastic market.
• D) the deadweight loss is less than if the firm price discriminated.

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Definitions:

Intrinsic Value

The inherent or actual value of an asset, investment, or company, based on underlying perception of its true value including all aspects of the business.

Annual

Refers to something occurring once every year.

Par Value

The face value or nominal value of a bond or stock, which is the amount paid out at maturity or the value on which dividend payments are calculated.

Yield To Maturity

The total return anticipated on a bond if it is held until it matures, including all interest payments and principal repayment.