One necessary condition for effective price discrimination is:
a. identical tastes among buyers.
b. difference in the price elasticity of demand among buyers.
c. a single, homogeneous market.
d. two or more markets with easy resale of products between them.
Question 2
According to the income effect, when the price of automobiles rises, people buy fewer automobiles because:
a. they substitute other forms of transportation for driving.
b. the nominal amount of their paychecks is smaller.
c. the purchasing power of their income is reduced.
d. their demand for automobiles is very elastic.
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