Price Discrimination Is Related to Elasticity Because

question 134

Multiple Choice

Price discrimination is related to elasticity because

• A) the firm can increase revenues by charging customers with elastic demands higher prices and charging customers with inelastic demands lower prices.
• B) the firm can increase revenues by charging customers with elastic demands lower prices and charging customers with inelastic demands higher prices.
• C) the firm can increase revenues by charging all customers higher prices.
• D) None of the above; elasticity and price discrimination are unrelated.

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Definitions:

Journal Entries

Journal entries are the basic means of recording financial transactions in the accounting system, consisting of debits and credits.

Double-declining-balance Method

An accelerated depreciation method that doubles the regular depreciation rate, allowing faster write-off of asset value.

Straight-line Method

Straight-line Method is a depreciation technique that allocates an equal amount of depreciation expense for an asset over its useful life, representing a consistent annual charge.

Book Value

Book value refers to the net value of an asset calculated as the original cost minus any depreciation, amortization, or impairment costs.