Part A: Multiple Choice Questions:
The seller must have market power, that is the seller must have some control over price The seller must be able to identify different customer groups with different demand elasticities The seller must be able to prevent arbitrage between the two groups All of the above You’ve just decided to add a new line to your manufacturing plant. Compute the expected loss/profit from the line addition if you estimate the following:
There is a 70% chance that profits will increase by $100,000.
There is a 20% chance that profits will remain the same. There is a 10% chance that profits will decrease by $15,000. Loss of $15,000 ...
