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Aaliyah Francois
on Dec 12, 2024

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A firm that uses price discrimination to enhance its net revenues will

A) expand output as long as price exceeds average total costs.
B) expand output as long as average total costs are declining.
C) charge a higher price to consumers with a more elastic demand for the firm's product.
D) charge a lower price to consumers with a more elastic demand for the firm's product.

Average Total Costs

The average cost for each unit produced, found by dividing the full cost of production by the quantity of units produced.

Elastic Demand

A situation where the demand for a product or service significantly changes in response to price changes.

Net Revenues

The amount of income that remains after subtracting all expenses, taxes, and costs related to the revenue-generating activities.

  • Discern how price discrimination modifies consumer prices depending on demand elasticity.
  • Evaluate the correlation between a firm's revenue and its output in the context of price discrimination.
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Ragan StrouthDec 14, 2024
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