A Perfectly Competitive Firm Cannot Practice Price Discrimination Because

question 248

Multiple Choice

A perfectly competitive firm cannot practice price discrimination because

• A)a firm that breaks even in the long run cannot afford to engage in yield management.
• B)it does not advertise; this prevents the firm from marketing its product to different segments of the market.
• C)each consumer in a perfectly competitive market has the same willingness to pay.
• D)the firm can only charge the market price.

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Definitions:

Statement of Comprehensive Income

A financial statement that includes all changes in equity during a period except those resulting from investments by owners and distributions to owners, encompassing both net income and other comprehensive income items.

Average Inventory

The average stock of goods held over a certain period, calculated to understand inventory levels better.

Cash Coverage Ratio

A metric that measures a company's ability to pay its interest obligations with its cash before deducting interest and taxes.