One requirement for a firm pursuing a price-discrimination strategy is the ability to segment the market for its product. This means that
A) the firm must choose a marketing strategy that appeals to different segments of the economy.
B) the firm must be able to divide the market in a way that makes arbitrage impossible.
C) the firm must be willing to offer price discounts for senior citizens and children.
D) the firm must set different prices for different regions where the product is sold.
Question 2
Refer to Table 16-3. Suppose Julie's marginal cost of providing this service is constant at 7 and she charges each customer according to his or her willingness to pay instead of a uniform price of 7. Which of the following statements is true?
A) Julie has converted the consumer surplus (from a uniform price) into economic profit.
B) Julie's has converted the producer surplus (from a uniform price) into consumer surplus.
C) Julie is worse off because the demand for her services is reduced.
D) Julie's customers are better off because their consumer surplus has increased.
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