Which of the Following Is Not a Way by Which

question 53

Multiple Choice

Which of the following is not a way by which price discriminating firms can segment a market?

• A) on the basis of time of purchase, for example long-distance calling
• B) by requiring an advance purchase, for example air tickets
• C) on basis of the buyer's location, for example requiring out-of-state students to pay higher tuition
• D) on the basis of the supplier's marginal cost of production, for example requiring customers to pay a premium for customizing options

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Definitions:

Barriers to Entry

Obstacles that make it difficult for new competitors to enter a market, such as high startup costs or complex regulations.

Natural Monopoly

A situation in the market where due to high initial costs and substantial economies of scale, a single firm can supply a product or service at a lower cost than any potential competitor, leading to a market dominated by one supplier.

Network Effects

Increases in the value of a product to each user, including existing users, as the total number of users rises.

Rent-seeking Behavior

Activities undertaken by individuals or firms to increase their own wealth without creating new wealth, often through manipulating the social or political environment in which economic activities occur.