Price discrimination exists:
A. only in perfectly competitive markets.
B. because sellers try to exploit differences in customers’ willingness to pay.
C. in all industries, regardless of market structure.
D. only when demand is inelastic.
B. because sellers try to exploit differences in customers’ willingness to pay.
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When an investor buys a corporate bond, the face value of the bond is
A) a measure of ownership in the corporation. B) a loan to the corporation. C) the coupon rate of the bond. D) a dividend payment on the bond.
If you advertise and your rival advertises, you each will earn $5 million in profits. If neither of you advertises, you will each earn $10 million in profits. However, if one of you advertises and the other does not, the firm that advertises will earn $15 million and the non-advertising firm will earn $1 million. Suppose this game is repeated for a finite number of times, but the players do not know the exact date at which the game will end. The players can earn collusive profits as a Nash equilibrium to the repeated play of the game if the probability the game terminates in any period is:
A. 1. B. close to zero. C. greater than 1. D. None of the answers is correct.