A Firms Sells an Identical Product to Two Groups of Consumers

Multiple Choice

A firms sells an identical product to two groups of consumers, A and B. The firm has decided that ordinary price discrimination is feasible and wishes to set prices that maximize profits. Which of the following best describes the price and output strategy that will maximize profits?

A) MRA = MRB = MC.
B) (MRA - MRB) = (1 - MC) .
C) PA = PB = MC.
D) MRA = MRB.