Price Discrimination

question 104

Multiple Choice

Price discrimination:

• A) by firms selling to final consumers is illegal, but it is usually legal in selling to intermediaries.
• B) is not covered by Federal laws, but in some states it is illegal.
• C) is always illegal.
• D) may be legal if the firm can prove that different prices were set based on different costs.
• E) None of these alternatives is correct.

---

Definitions:

Closing Entry

Journal entries used to transfer temporary account balances to permanent accounts and to reset the balances of temporary accounts to zero at the end of each accounting period.

Revenue Accounts

Accounts used to record the income generated from a company’s core operating activities.

Expense Accounts

These are ledgers that track the costs incurred by a business during its operations, excluding the purchase of inventory.

Income Summary Account

A temporary ledger account used to transfer the balances of all revenue and expense accounts at the end of an accounting period to determine the net income or loss.