The conditions in which vertical relationships can enhance a firm's ability to price discriminate include
a. the manufacturer's product is of value to just one type of customer
b. the costs of arbitraging the price difference across markets is large
c. the manufacturer acquires the distributer in the higher priced market
d. lack of competition provides the manufacturer with the ability to price above marginal cost
d
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You offer an extended warranty for your product that is purchased by a few customers. If the product typically fails 2% of the time,
a. you should price the warranty at less than 2% of the product price b. you should price the warranty at exactly 2% of the product price c. you should price the warranty at more than 2% of the product price d. Cannot tell from this information
What is true of both expansions and recessions?
a. There is a poorer than normal match between workers and their jobs. b. The labor market clears. c. The economy operates at its potential output. d. Cyclical unemployment is zero. e. None of the above.