Question

1. Price discrimination exists when a firm sells ________ goods at more than one price to ________ groups of customers.

a.	different; similar	d.	identical; different
b.	existing; distinct	e.	limited; restricted
c.	discounted; large

2.    Price discrimination exists when a firm is able to sell the same good at more than one price to different groups of

a.	producers.	d.	promoters.
b.	firms.	e.	commodities.
c.	consumers.

3. Firms are most likely to engage in price discrimination if

a.	the goods can be resold in the market without any loss in value or quality.
b.	the goods can be resold in the market, but there is a large loss in the value or quality of the product.
c.	the goods cannot be resold in the market.
d.	consumers all have a similar reservation price for the goods produced.
e.	consumers of all ages have similar preferences for the goods produced.

Answer 1

a) "D"

Price discrimination is when a similar good is sold at a different price to different consumers.

b) "C"

Same good is sold at a different price to different consumers.

c) "C"

If the good cannot be resold in the market. if it can be resold then the consumer can but the one offering the lowest price and it will make the supply elastic and impossible to discriminate.