For a Firm That Can Effectively Price Discriminate, Who Will

question 155

Multiple Choice

For a firm that can effectively price discriminate, who will be charged a lower price?

• A)customers who have an elastic demand for the product
• B)customers who have an inelastic demand for the product
• C)buyers that are members of the largest market segment
• D)buyers that are members of the smallest market segment

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Definitions:

Substitutes

Products or services that can be used in place of each other, satisfying the same needs or wants of the consumer.

Monopolist

A single seller in a market who has significant control over the entire supply of a good or service, and thus can influence price.

Marginal Revenue

The additional income generated from selling one more unit of a product or service.

Equilibrium

When aggregate demand equals aggregate supply.