Multiple Choice
Which of the following is the main principle behind price discrimination?
A) If the demand curves are different, it is more profitable to set different prices in different markets than a single price that covers all markets.
B) To maximize profit the firm should set a higher price in markets with more inelastic demand.
C) Arbitrage makes it difficult for a firm to set different prices in different markets thereby reducing the profit from price discrimination.
D) All of the answers are correct.
Correct Answer:
Verified
Correct Answer:
Verified
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