How Does Price Discrimination Help Cover Fixed Costs

question 59

Multiple Choice

How does price discrimination help cover fixed costs?

• A) If price discrimination expands the size of the market, the fixed costs can be spread over a much larger output level.
• B) If price discrimination lowers profits, firms will produce less and have lower fixed costs.
• C) Consumers with inelastic demand are less costly to serve, lowering the fixed costs of production.
• D) Consumers with elastic demand are less costly to serve, lowering the fixed costs of production.

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