Which of the Following Is NOT Necessary for Price Discrimination

question 354

Multiple Choice

Which of the following is NOT necessary for price discrimination to occur?

• A) The firm must be able to separate the market into identifiable groups.
• B) The firm must be selling a durable good.
• C) The firm must have a downward sloping demand curve.
• D) The firm has to be able to prevent resale of the product or service.

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Definitions:

Variable Expenses

Costs that vary directly with the level of production or sales volume.

Operating Income

Earnings before interest and taxes (EBIT), representing the profit from a company’s ordinary, core business operations.

Contribution Format

An income statement layout that separates fixed and variable costs, allowing for the calculation of contribution margin and easier analysis of profitability.

Operating Income

A financial metric that shows how much of a company's revenue is left over after paying for variable costs of production like wages and raw materials.