Which of the following is NOT a principle of price discrimination?
A) It is more profitable to set different prices in markets with different demand curves than a single price that covers all markets.
B) To maximize profit the firm should set a higher price in markets with more elastic demand.
C) To maximize profit the firm should set a higher price in markets with more inelastic demand.
D) Arbitrage makes it difficult for a firm to set different prices in different markets thereby reducing the profit from price discrimination.
Correct Answer:
Verified
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Figure: Monopolist
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Figure: Price-Discriminating
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