Suppose That a Price-Discriminating Producer Divides Its Market into Two

question 233

Multiple Choice

Suppose that a price-discriminating producer divides its market into two segments.If the firm sells its product at a price of $34 in the market segment with relatively less-elastic customer demand, the price in the market segment with more-elastic customer demand will be

• A)greater than $34.
• B)less than $34.
• C)less than marginal revenue in that market segment.
• D)equal to marginal revenue in that market segment.

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Definitions:

Corporate Income Tax

A tax imposed on the net income or profit of corporations.

Governs Least

A principle often associated with libertarianism, suggesting that the best government is one that exercises minimal intervention in personal lives and the economy.

Government

The organization or system through which a community or nation is governed, responsible for creating and enforcing rules and managing public resources.

Thomas Jefferson

The third President of the United States, a Founding Father recognized for authoring the Declaration of Independence.