Why does the strategy of pricing-to-market depend on the assumption of market segmentation?
What will be an ideal response?
Answer: Pricing-to-market means that a producer charges different prices in different markets for the same good. Clearly, this requires the markets to be segmented to prevent arbitrage in the goods market, and the producer must have some degree of monopoly power in the sense that the demand curve that it faces in each of the markets is not perfectly elastic.
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Indicate whether the statement is true or false
The demand for an asset rises if ________ falls
A) risk relative to other assets B) expected return relative to other assets C) liquidity relative to other assets D) wealth