Author Question: Suppose group price discrimination is possible but a firm chooses not to and sets the same price in ... (Read 127 times)

jc611 · **on:** Jul 1, 2018

Suppose group price discrimination is possible but a firm chooses not to and sets the same price in each market. As a result

A) price elasticity of demand is the same in each market.
B) the price-inelastic market will buy zero units.
C) marginal revenue in the more price-elastic market exceeds marginal revenue in the less price-elastic market.
D) the deadweight loss is less than if the firm price discriminated.

Question 2

If a firm does NOT know its rival's profit function, then we consider that information to be

A) irrelevant in deciding its best strategy.
B) private.
C) common knowledge.
D) Pareto sub-optimal.