1.) Suppose you have 5 identical Bertrand (price-competing) firms with MC for each equal to $10. The market elasticity of demand is -2.0. What is the market price?    a. none of the available options. b.  $10 c. $12.50  1d. 0.71.

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Price Discrimination

Price discrimination or differential pricing is based on the principle that the seller will charge the buyer a price based on the buyer’s ability and willingness to pay for the product rather than applying uniform pricing for all.