Economists cite some beneficial effects of price discrimination. What are these benefits and how do the antitrust laws treat price discrimination?
Benefits include the ability to sell a product at a low price to low-income consumers, while charging a higher price to high-income consumers. Even the wealthy may pay less than if discrimination were disallowed, since profits in the low-income market might permit a lower price in the high-income market. The Robinson-Patman Act (1936) and the Clayton Act (1914) generally discourage price discrimination.
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Refer to Figure 3-1. A decrease in the expected future price of the product would be represented by a movement from
A) A to B. B) B to A. C) D1 to D2. D) D2 to D1.
Refer to Figure 2-7. Assume that in response to changing consumer demands, Apple cuts back on the production of traditional vehicles and increases its production of self-driving vehicles. This strategy is best represented by the
A) movement from J to G in Graph B. B) movement from L to K in Graph C. C) movement from E to F in Graph A. D) movement from H to J in Graph B.