мсо 20 A profit-maximising firm produces homogenous (identical) units of output at a constant marginal cost and the units can be sold in two distinct market segments, which are segments A and B. On the assumption that the absolute value of the price elasticity of demand is lower in market segment A than it is in market segment B, if the firm decides to exercise price discrimination, we would expect to observe: A I do not want to answer this question. В a higher price in market segment A to reflect the lower price elasticity the same price in both market segments since the marginal cost of production is the same for both markets and profits are maximised at MR = MC in both C markets D a higher price in market segment B to reflect the higher price elasticity E MR < MC in both market segments because the sum of the price elasticities must be equal to 1 (unity) MR > MC in market segment B because the higher elasticity allows a mark up of marginal revenue over marginal cost

мсо 20 A profit-maximising firm produces homogenous (identical) units of output at a constant marginal cost and the units can be sold in two distinct market segments, which are segments A and B. On the assumption that the absolute value of the price elasticity of demand is lower in market segment A than it is in market segment B, if the firm decides to exercise price discrimination, we would expect to observe: A I do not want to answer this question. В a higher price in market segment A to reflect the lower price elasticity the same price in both market segments since the marginal cost of production is the same for both markets and profits are maximised at MR = MC in both C markets D a higher price in market segment B to reflect the higher price elasticity E MR < MC in both market segments because the sum of the price elasticities must be equal to 1 (unity) MR > MC in market segment B because the higher elasticity allows a mark up of marginal revenue over marginal cost

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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