7. Which of the following activities is a valid explanation for the benefits of price discrimination?

(a) Higher total revenue is possible

(b) Less advertising is possible;

(c) Helps to drive competitors out of business is possible;

(d) Increases salesis possible

1. (a)

2. (a), (b)

3. (a), (b), (c)

4. (a), (b), (c), (d)

8. The following describes the prerequisites for applying the price discrimination strategy. Which word is appropriate in parentheses?

(a) In order to enforce price discrimination, the firm must be the price (setter, acceptor).

(b) It must be possible to differentiate the market from a market with a (lower, higher) price to a market with a (lower, higher) price such that resale is not possible.

(c) In each market, the price elasticity of demand must be different. A market with a low price will be (more, less) elastic in demand than a market with a high price.

(a) setter, high, low, less

(b) setter, low, high, more

(c) inmates, high, low, less

(d) inmates, low, high, more