Which of the Following Is (Are) True

question 165

Multiple Choice

Which of the following is (are) true?

• A) Every instance of firms charging different prices is price discrimination.
• B) Different prices may reflect different costs.
• C) Price differentials based on differences in production costs are examples of price discrimination.
• D) B and C are true.

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Definitions:

Demand Curve

A graphical representation of the relationship between the price of a good and the quantity of that good consumers are willing to purchase at various prices.

Market Power

The ability of a firm or group of firms to influence or control the terms and conditions of a market, including prices.

Monopolistic Competition

A market structure characterized by many firms offering similar but not identical products, resulting in some degree of market power for each firm.

Differentiate Their Product

The strategy companies use to make their product or service stand out from competitors.