Which of the Following Would a Firm Do If It

question 29

Multiple Choice

Which of the following would a firm do if it could practice perfect price discrimination?

• A)Allow resale of its product.
• B)Charge every buyer a different price.
• C)Charge a price based on the quantity of a product bought.
• D)Use odd pricing.

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Definitions:

Normal Profits

The minimum level of profit needed for a company to remain competitive in the market, also seen as the opportunity cost of capital.

Purely Competitive Firm

A business operating in a market where there are many buyers and sellers, with none being able to influence prices significantly by their individual actions.

Costs

The value of resources consumed in the production of goods and services, including both fixed and variable expenses.

Differentiated Product

A product that is distinct in some way from others in the same category, allowing the seller to compete on factors other than price.