In Order for Price Discrimination to Be Successful

question 78

Multiple Choice

In order for price discrimination to be successful,

• A) there must be a strong case for arbitrage.
• B) national markets must be kept separate.
• C) demand must be very elastic.
• D) a large change in demand must be triggered by a small change in price.

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Definitions:

Equity

The value of an ownership interest in property, including shareholders' ownership in a corporation.

EPS

Earnings Per Share, a financial ratio that measures the amount of net income earned per share of stock outstanding.

Operating Leverage

A measure of how much a company can increase its operating income by increasing revenue, indicating the ratio of fixed costs to variable costs.

EBIT

Earnings Before Interest and Taxes; a measure of a company's profitability that focuses on earnings generated from its core operations before the impact of financial and tax activities.