Use the Following to Answer Questions

question 80

Multiple Choice

Use the following to answer questions:
Figure: PPD
-(Figure: PPD) Refer to the figure. Which of the following statements best explains why a firm that perfectly price discriminates would sell additional units beyond c units of output?

• A) If the firm can perfectly price discriminate it can charge a price equal to the consumers' willingness to pay, which for all units beyond c is higher than the firm's marginal cost for those units.
• B) The firm will continue to increase profits as long as consumers' willingness to pay is greater than zero.
• C) A firm will not sell beyond c units of output. The marginal cost is greater than consumers' willingness to pay for these units.
• D) A firm will not sell beyond c units of output. The marginal cost is greater than the firm's marginal revenue for these units.

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Definitions:

Social Surroundings

The societal and cultural factors that influence individuals' behavior, preferences, and interactions within a community or society.

Physical Surroundings

The environmental factors or conditions in a specific location that can affect individuals' behaviors, experiences, and interactions.

Market Leader

A company that has the largest market share in a given industry, dominating the competition in terms of sales, innovation, or brand recognition.

Low-involvement Product

A product that requires minimal thought and effort from the consumer prior to and during purchase.