Which of the Following Is a Reason Why a Firm

question 95

Multiple Choice

Which of the following is a reason why a firm would not engage in price discrimination?

• A)Price discrimination is illegal in some western states and the owners of firms in these states face civil or criminal prosecution if they engage in price discrimination.
• B)Some firms are not able to segment the market for the products they sell.
• C)Some firms do not want to violate the law of one price.
• D)The transactions costs associated with selling the product exceed the price of the product.

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Definitions:

Kinked Demand

A demand curve that has a distinct bend or "kink" at a certain price level, reflecting different elasticity above and below that price.

Marginal Cost

The increase in cost resulting from the production of an extra unit of a good or service.

Output Level

The total amount of goods or services produced by a business or economy during a specific period.

Profit Maximizing

The process by which a company determines the price and output level that generates the maximum profit.