The Two Conditions That Are Necessary for Profitable Price Discrimination

question 124

Multiple Choice

The two conditions that are necessary for profitable price discrimination are:

• A)the firm must sell a standardized product and the firm must be able to keep its national markets separate.
• B)the firm must be able to keep its national markets separate and the existence of different price elasticities of demand in different countries.
• C)the firm must rely upon substantial economies of scale and the firm cannot be a member of a major trade bloC.
• D)the firm must sell highly differentiated products and the existence of different prices elasticities of demand in different countries.

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Definitions:

Asset Account

Accounts on a balance sheet that represent the resources owned by a company, which are expected to provide future economic benefits.

Liabilities

Financial obligations of a business, including debts and other amounts owed to creditors.

Accounts Receivable

An asset account on the balance sheet that represents money owed to a company by customers for goods or services that have been delivered or used but not yet paid for.

Accounts Payable

Liabilities to creditors that are to be paid within a short period of time, typically within one year.