Question 1

A firm practicing direct price discrimination will charge a higher price to

Accepted Answer

A)  Consumers with an elastic demand
B)  All consumers
C)  Consumers with an inelastic demand
D)  Consumers with unitary elastic demandE) None of the above
F) A) and C)

Question 2

All these are motivations for tie-in-sales except,

Accepted Answer

A)  Efficiency
B)  Assure quality
C)  Provide secret price discounts
D)  All the aboveE) All of the above
F) A) and B)

Question 3

When grocery stores offer discount coupons on Sunday papers,it is trying to

Accepted Answer

A)  Price discriminate
B)  Undercut its competition
C)  Reward the frequent readers
D)  Provide a social serviceE) All of the above
F) A) and D)

Question 4

Restaurant provide discounts to seniors because

Accepted Answer

A)  They have a less-price elastic demand
B)  They have a more-price elastic demand
C)  They are the main source of income
D)  None of the aboveE) A) and B)
F) A) and D)

Question 5

When a firm practices perfect price discrimination,

Accepted Answer

A)  Consumer surplus is maximized
B)  Producer surplus is minimized
C)  Producer surplus is maximized
D)  None of the aboveE) C) and D)
F) B) and D)

Question 6

Firms choose to price discriminate

Accepted Answer

A)  To earn higher profits
B)  To sell goods to consumers who otherwise would not have purchased
C)  Both a and b
D)  None of the aboveE) A) and D)
F) B) and C)

Question 7

Use the following table to answer questions 23 - 26
Assume the cost of producing the goods is zero
 
-Suppose the monopolist only sold the goods separately.What price will the monopolist charge for Good 1 to maximize revenues for good 1?

Accepted Answer

A)  $2,300
B)  $2,800
C)  $1,200
D)  $1,700E) None of the above
F) B) and C)

Question 8

Use the following table to answer questions 23 - 26
Assume the cost of producing the goods is zero
 
-Suppose the monopolist only sold the goods separately.What price will the monopolist charge for Good 2 to maximize revenues for good 2?

Accepted Answer

A)  $2,300
B)  $2,800
C)  $1,200
D)  $1,700E) None of the above
F) All of the above C

Question 9

In theory,price discrimination

Accepted Answer

A)  Reduces the number of consumers who purchase the firm's product
B)  Decreases producer surplus
C)  Decreases consumer surplus
D)  Has no effect on deadweight lossE) B) and D)
F) None of the above

Question 10

Airlines charge a ____________ to business travelers compared to leisure travelers because business travelers have a ____________ demand than leisure travelers.

Accepted Answer

A)  Higher;more elastic
B)  Higher;less elastic
C)  Lower;more elastic
D)  Lower;less elasticE) A) and B)
F) A) and C)

Question 11

Use the following table to answer questions 15 - 18
Assume the cost of producing the goods is zero
 
-Suppose the monopolist only sold the goods separately.What prices will the monopolist charge for Good 2 to maximize revenues for good 1?

Accepted Answer

A)  $4,500
B)  $5,000
C)  $1,500
D)  $1,000E) C) and D)
F) None of the above

Question 12

When deciding what price to charge customers,a firm may choose to charge different prices based on customers'

Accepted Answer

A)  Age
B)  Willingness to pay
C)  Location
D)  All of the aboveE) A) and B)
F) None of the above

Question 13

(pg 168) Charging prices closer to what consumers are willing to pay for a good

Accepted Answer

A)  Reduces consumers surplus
B)  Increases producer surplus
C)  Both a and b
D)  None of the aboveE) A) and C)
F) C) and D)

Question 14

The practice of buying a firm's good in one market at a low price and selling it in another market for a higher price in order to profit from the price difference is known as

Accepted Answer

A)  Predatory pricing
B)  Price collusion
C)  Arbitrage
D)  Mark-up pricingE) B) and D)
F) B) and C)

Question 15

It is illegal for business to price discriminate when selling goods to other businesses unless

Accepted Answer

A)  Price discounts are cost-justified
B)  Discounts are offered to meet competitors' price
C)  Both a and b
D)  It is not illegal for businesses to price discriminateE) None of the above
F) C) and D) C

Question 16

For a firm to maximize total profits through price discrimination,it should

Accepted Answer

A)  Firms should charge a low price to high-value consumers and a high price to low-value consumers
B)  Firms should charge a high price to high-value consumers and a high price to low-value consumers
C)  Firms should charge a low price to high-value consumers and a low price to low-value consumers
D)  Firms should charge a high price to high-value consumers and a low price to low-value consumersE) B) and C)
F) A) and D)

Question 17

Chinese restaurants that charge one price per customer for their buffet is an example of

Accepted Answer

A)  Individual pricing
B)  Pure bundling
C)  Mixed Bundling
D)  None of the aboveE) None of the above
F) A) and B)

Question 18

The goal of price discrimination is to

Accepted Answer

A)  Convert consumer surplus to producer surplus
B)  Maximize profits
C)  Both a and b
D)  Make pricing decision difficultE) A) and B)
F) A) and C) C

Question 19

Firms can practice indirect price discrimination by

Accepted Answer

A)  Offering volume discounts
B)  Using two-part pricing
C)  Offering a bundle containing a number of units
D)  All of the aboveE) A) and B)
F) None of the above

Question 20

A firm charging different customers different prices for the same product is engaged in:

Accepted Answer

A)  Price discrimination
B)  Price matching
C)  Markup pricing
D)  Predatory pricing.E) A) and B)
F) None of the above

Exam 13: Direct Price Discrimination Indirect Price Discrimination

A firm practicing direct price discrimination will charge a higher price to

Correct AnswerverifiedShow Answer

All these are motivations for tie-in-sales except,

Correct AnswerverifiedShow Answer

When grocery stores offer discount coupons on Sunday papers,it is trying to

Correct AnswerverifiedShow Answer

Restaurant provide discounts to seniors because

Correct AnswerverifiedShow Answer

When a firm practices perfect price discrimination,

Correct AnswerverifiedShow Answer

Firms choose to price discriminate

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Use the following table to answer questions 23 - 26 Assume the cost of producing the goods is zero -Suppose the monopolist only sold the goods separately.What price will the monopolist charge for Good 1 to maximize revenues for good 1?

Correct AnswerverifiedShow Answer

Use the following table to answer questions 23 - 26 Assume the cost of producing the goods is zero -Suppose the monopolist only sold the goods separately.What price will the monopolist charge for Good 2 to maximize revenues for good 2?

Correct AnswerverifiedC

In theory,price discrimination

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Airlines charge a ____________ to business travelers compared to leisure travelers because business travelers have a ____________ demand than leisure travelers.

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Use the following table to answer questions 15 - 18 Assume the cost of producing the goods is zero -Suppose the monopolist only sold the goods separately.What prices will the monopolist charge for Good 2 to maximize revenues for good 1?

Correct AnswerverifiedShow Answer

When deciding what price to charge customers,a firm may choose to charge different prices based on customers'

Correct AnswerverifiedShow Answer

(pg 168) Charging prices closer to what consumers are willing to pay for a good

Correct AnswerverifiedShow Answer

The practice of buying a firm's good in one market at a low price and selling it in another market for a higher price in order to profit from the price difference is known as

Correct AnswerverifiedShow Answer

It is illegal for business to price discriminate when selling goods to other businesses unless

Correct AnswerverifiedC

For a firm to maximize total profits through price discrimination,it should

Correct AnswerverifiedShow Answer

Chinese restaurants that charge one price per customer for their buffet is an example of

Correct AnswerverifiedShow Answer

The goal of price discrimination is to

Correct AnswerverifiedC

Firms can practice indirect price discrimination by

Correct AnswerverifiedShow Answer

A firm charging different customers different prices for the same product is engaged in:

Correct AnswerverifiedShow Answer

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C

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Airlines charge a to business travelers compared to leisure travelers because business travelers have a demand than leisure travelers.

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C

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C

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