When a Firm Practices Price Discrimination in Two Market Segments

question 5

Multiple Choice

When a firm practices price discrimination in two market segments, the firm:

• A) must be able to identify market segments that have different price elasticities.
• B) will typically charge higher prices in the larger market segment.
• C) must be selling a heterogeneous product.
• D) must choose market segments that have inelastic demand.
• E) sets price according to the different costs of serving different market segments.

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Definitions:

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