Which of the Following Is the Main Principle of Price

question 214

Multiple Choice

Which of the following is the main principle of price discrimination?
I. It is more profitable to set different prices in markets with different demand curves than charge the same price in all markets.
II. To maximize profits, firms should charge lower prices in markets with more elastic demands.
III. Arbitrage increases the profit opportunities of price discrimination.

• A) I and III only
• B) II only
• C) I and II only
• D) I, II, and III

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Definitions:

Milgram Experiment

A psychological experiment conducted by Stanley Milgram in the 1960s to study obedience to authority, where participants were instructed to administer electric shocks to another person.

Stanford University Prison Experiment

A psychological study conducted by Philip Zimbardo in 1971 at Stanford University, where students were assigned roles of prisoners and guards to explore the effects of perceived power.

Generalization

Drawing a conclusion about a certain characteristic of a population based on a sample from it.

Logical Support

The provision of reasons or evidence to justify a claim or argument.