Which of the following would prevent a pharmaceutical manufacturer from successfully using price discrimination?
a. It's customers all have the same elasticity of demand for its drugs.
b. The demand schedule for pharmaceuticals is horizontal.
c. Low-price customers could resell the drugs to high-priced customers.
d. All of the above.
C
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The annual rental rate for a machine is
a. the yearly depreciation and maintenance costs for the machine. b. the yearly interest costs associated with owning the machine. c. the initial purchase price of the machine divided by the number of years the machine is expected to last. d. the sum of the yearly depreciation, maintenance, and interest costs associated with owning the machine.
Assume a consumer purchases a combination of goods X and Y such that MUx / ?Px = 20 units of utility per dollar and MUy / Py = 10 units of utility per dollar. To maximize utility, the consumers should buy:
a. neither X nor Y. b. less of both X and Y. c. more of both X and Y. d. more of X and less of Y. e. less of X and more of Y.