Assume That a Profit-Maximizing Firm Practices Price Discrimination in Two

question 8

Multiple Choice

Assume that a profit-maximizing firm practices price discrimination in two different market segments. If the marginal cost of producing the good is the same, the price:

• A) will be lower in the segment with lower cross price elasticity of demand.
• B) will be higher in the segment with higher income elasticity of demand.
• C) will be lower in the segment with lower fixed costs.
• D) will be higher in the segment with more inelastic demand.
• E) will be higher in the segment with higher marginal revenue.

---

Definitions:

Infant

A very young child or baby, typically from birth until 12 months of age.

Habituation

A decrease in response to a stimulus after repeated presentations, illustrating one of the simplest forms of learning.

Chamomile-Scented Toys

Toys infused with chamomile scent, often used to soothe and relax children due to the calming properties of chamomile.

Skin Balm

A topical preparation intended to protect, heal, or soothe the skin.