Which of the following statements is FALSE?
I. If the demand curves are different, it is more profitable to set a single price than different prices in markets.
II. To maximize profit the firm should set a lower price in markets with more elastic demand.
III. The presence of arbitrage makes it easy for a firm to price discriminate.
A) I and II only
B) II only
C) III only
D) I and III only

Question

Quizplus · Accepted Answer

I is false because setting different prices in markets with different demand curves can lead to price discrimination, which can increase profits. 
II is true because a lower price in markets with more elastic demand can lead to a higher quantity sold and therefore higher profits. 
III is false because the presence of arbitrage can make it harder for a firm to price discriminate, as customers can buy the good at the lower price and resell it at a higher price in the other market.

Which of the Following Statements Is FALSE