Price Discrimination Is More Common in Service Industries Because

question 116

Multiple Choice

Price discrimination is more common in service industries because

• A) low-price buyers will find it virtually impossible to resell the products of such industries to high-price buyers.
• B) the costs of providing such industries' products to different groups of buyers vary dramatically.
• C) the price elasticity of demand is the same for all groups of buyers in these industries.
• D) all firms in these industries have significant monopoly power over price.

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Definitions:

Average Total Cost Curve

A graph that represents the total cost of production (fixed and variable costs combined) divided by the quantity of output produced, at various levels of output.

Diffusion

The spread of an innovation through its widespread imitation.

Inventions

Original creations or discoveries that offer new technical solutions or enhance existing ones.