Asked by Jillian Hearne on May 05, 2024
Verified
Which of the following can defeat the profit-maximizing strategy of price discrimination?
A) Consumer surplus
B) Deadweight loss
C) Market power
D) Arbitrage
Profit-Maximizing Strategy
A plan or approach designed by a firm to ensure highest possible profit from its operations, taking into account costs and market demand.
- Comprehend the principle of arbitrage and its influence on the formulation of market pricing tactics.
Verified Answer
LJ
Lauryn JohnsonMay 10, 2024
Final Answer :
D
Explanation :
Arbitrage can defeat the profit-maximizing strategy of price discrimination by allowing consumers to buy a product at a lower price in one market and sell it in another market where the price is higher, thus undermining the seller's ability to set different prices in different markets.
Learning Objectives
- Comprehend the principle of arbitrage and its influence on the formulation of market pricing tactics.
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