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.

---

Definitions:

Recognize

In an accounting context, to recognize is to formally record an item within the financial statements of an entity, acknowledging its existence or occurrence.

Short-term Capital Loss

A loss realized from the sale or exchange of a capital asset held for one year or less, which can be used to offset capital gains for tax purposes.

Long-term Capital Gain

A profit from the sale of an asset held for more than a year, typically taxed at a lower rate than regular income.

Section 1245

A section of the U.S. Internal Revenue Code that defines the tax treatment of the gain from the sale of depreciable property.