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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.


Definitions:

Crystallized Intelligence

Intelligence that reflects both knowledge gained through experience and the ability to use that knowledge.

Fluid Intelligence

Intelligence that reflects the ability to process information, particularly in novel or complex circumstances.

Mental Set

A psychological tendency to approach problems in a specific way, using methods that have been successful in the past.

Functional Fixedness

A cognitive bias that limits a person to using an object only in the way it is traditionally used, hindering the ability to think of alternative uses.

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