A firm that practices multimarket price discrimination will set the lower price in the market that has the most elastic demand
What will be an ideal response?
True. The firm will equate marginal revenue across markets. Since MR = p(1 + 1/elasticity), markets with greater elasticity require lower prices.
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What does willingness to pay measure?
a) the amount a buyer is willing to pay for a good minus the amount the buyer actually pays for it b) the amount a seller actually receives for a good minus the minimum amount the seller is willing to accept c) the maximum amount a buyer is willing to pay minus the minimum amount a seller is willing to accept d) the maximum amount that a buyer will pay for a good
For a firm in a perfectly competitive market, the price of the good is always
a. equal to marginal revenue. b. equal to total revenue. c. greater than average revenue. d. equal to the firm's efficient scale of output.