Two Months After Apple Introduced the IPhone in 2007, the Company

question 53

Multiple Choice

Two months after Apple introduced the iPhone in 2007, the company reduced the price from $600 to $400. How is this drop of price an example of price discrimination?

• A) Early adopters are less sensitive to price than late adopters.
• B) Early adopters have a higher demand than late adopters.
• C) Early adopters have a more elastic demand curve than late adopters.
• D) It's not an example of price discrimination.

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Definitions:

Remodeling

The process of improving, updating, or altering the structure or layout of a building to enhance its appearance or functionality.

Marginal Costs

The additional charge associated with making one more unit of a product or service.

Fixed Capital

Assets and investments in physical goods such as buildings and machinery that are not consumed in the production process.

Variable Labor

Labor costs that vary directly with the level of production or business activity.