Question 1

​Amusement parks often offer coupons to the local market that are not available to tourists.This is an example of

Accepted Answer

A) ​Direct discrimination scheme 
B) Indirect discrimination scheme 
C) Both of the above 
D) ​None of the above 
A) ​Direct discrimination scheme 
B) Indirect discrimination scheme 
C) Both of the above 
D) ​None of the above

Question 2

​For direct price discrimination to work

Accepted Answer

A) ​The firm must be able to identify the members of the low value group 
B) The firm must charge a single price to all its customers 
C) The firm need not worry about any arbitrage since all its customers are charged the same price 
D) ​The firm should charge a higher price to those customers with the most elastic demand 
A) ​The firm must be able to identify the members of the low value group 
B) The firm must charge a single price to all its customers 
C) The firm need not worry about any arbitrage since all its customers are charged the same price 
D) ​The firm should charge a higher price to those customers with the most elastic demand

Question 3

​The idea behind price discrimination is

Accepted Answer

A) ​To be able to sell to high-value customers,who value the product most 
B) To be able to sell to the marginal customers,who are indifferent about the purchase 
C) To be able to sell to the low-value customers,who would otherwise not buy the product 
D) ​To be able to sell to both high and low value customers at different prices 
A) ​To be able to sell to high-value customers,who value the product most 
B) To be able to sell to the marginal customers,who are indifferent about the purchase 
C) To be able to sell to the low-value customers,who would otherwise not buy the product 
D) ​To be able to sell to both high and low value customers at different prices

Question 4

​Use the following table for  
-​If the groups are equal size and the firm can only set one price,how should the firm price the high-end wok?

Accepted Answer

A) ​Price low and sell to both the users 
B) Price high and sell only to the professional chefs 
C) Price low and sell only to the home users 
D) ​All of the above 
A) ​Price low and sell to both the users 
B) Price high and sell only to the professional chefs 
C) Price low and sell only to the home users 
D) ​All of the above

Question 5

​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 pricing 
A) ​Predatory pricing 
B) Price collusion 
C) Arbitrage 
D) ​Mark-up pricing

Question 6

​The strategy of sorting customers into high or low value based on the amount of sales made is known as the

Accepted Answer

A) ​Damaged goods strategy 
B) The willy-nilly strategy 
C) The Metering Strategy 
D) ​All of the above 
A) ​Damaged goods strategy 
B) The willy-nilly strategy 
C) The Metering Strategy 
D) ​All of the above

Question 7

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

Question 8

​Use the following table for question
  
-Given that the firm wants to sell both the versions,how high can the no-name brand be priced?​

Accepted Answer

A) ​$30 
B) $40 
C) $60 
D) ​$70 
A) ​$30 
B) $40 
C) $60 
D) ​$70

Question 9

​Many bars close to campuses have started offering cheaper beer to consumers with a student ID.These bars

Accepted Answer

A) ​Assume students have an inelastic demand curve 
B) Assume students have an elastic demand curve 
C) Are practicing price discrimination 
D) ​Both b and c 
A) ​Assume students have an inelastic demand curve 
B) Assume students have an elastic demand curve 
C) Are practicing price discrimination 
D) ​Both b and c

Question 10

​Use the following table for question
  
-​Given that the firm wants to sell both the versions,how high can the high-end professional knives be priced?

Accepted Answer

A) ​$60 
B) $70 
C) $80 
D) ​$100 
A) ​$60 
B) $70 
C) $80 
D) ​$100

Question 11

​For a retailer buying from a wholesaler,volume discounts do not violate the Robinson-Patman act because

Accepted Answer

A) ​To sell larger volumes,the retailer himself has to offer discounts 
B) To sell larger volumes,the retailer has to incur costs in promoting the item 
C) To sell larger volumes,the retailer has to hold the items in inventory longer 
D) ​All of the above 
A) ​To sell larger volumes,the retailer himself has to offer discounts 
B) To sell larger volumes,the retailer has to incur costs in promoting the item 
C) To sell larger volumes,the retailer has to hold the items in inventory longer 
D) ​All of the above

Question 12

​A supermarket sells you a pound of coffee on the condition that you buy a gallon of milk.This is an example of

Accepted Answer

A) ​Bundling 
B) Tie in Sale 
C) Price Discounting 
D) ​Both a and b 
A) ​Bundling 
B) Tie in Sale 
C) Price Discounting 
D) ​Both a and b

Question 13

​Use the following table for  
-Given that the firm offers both the products would the chefs ever pay the full $100 for the high-end wok​

Accepted Answer

A) ​Yes,because they value it at $100 
B) No,because they value it at $70 
C) No,because they can get a positive consumer surplus buying the no-name brand 
D) ​All of the above 
A) ​Yes,because they value it at $100 
B) No,because they value it at $70 
C) No,because they can get a positive consumer surplus buying the no-name brand 
D) ​All of the above

Question 14

​For direct price discrimination to work effectively

Accepted Answer

A) ​The low-valued customers should not be able to engage in arbitrage 
B) You need to charge the same price to the different groups 
C) Both groups should have the same elasticity of demand 
D) ​None of the above 
A) ​The low-valued customers should not be able to engage in arbitrage 
B) You need to charge the same price to the different groups 
C) Both groups should have the same elasticity of demand 
D) ​None of the above

Question 15

​Which of the following is FALSE about indirect price discrimination

Accepted Answer

A) ​It requires identifying some feature that is correlated with different value customers 
B) The firm must be able to charge different prices to the different value customers 
C) The firm must be able to prevent arbitrage 
D) ​All of the above 
A) ​It requires identifying some feature that is correlated with different value customers 
B) The firm must be able to charge different prices to the different value customers 
C) The firm must be able to prevent arbitrage 
D) ​All of the above

Question 16

​Use the following table for  
-​What is the maximum that the firm can charge for the no-name brand wok without losing customers?

Accepted Answer

A) ​$50 
B) $60 
C) $70 
D) ​$100 
A) ​$50 
B) $60 
C) $70 
D) ​$100

Question 17

​Hardcover Books
The marginal cost of printing a typical hard cover novel is $12.00 while the same book in paperback has a marginal cost of $2.00 lower.So why do publishers charge an average of $15 more for hard cover books?

Accepted Answer

Hard cover versus paperback is used as a

Question 18

​Use the following table for question
  
-​In this case the firm should

Accepted Answer

A) ​Produce both the versions and price discriminate since doing so gives a higher revenue 
B) Produce only the no-brand version 
C) Produce only the hi-end professional series 
D) ​Exit the marketplace 
A) ​Produce both the versions and price discriminate since doing so gives a higher revenue 
B) Produce only the no-brand version 
C) Produce only the hi-end professional series 
D) ​Exit the marketplace

Question 19

​Use the following table for  
-Given that the firm offers both the products,what prices can it offer to motivate the two groups to profitably self-sort into buying the correct brand​

Accepted Answer

A) ​No-name $60;High-end $100 
B) No-name $50;High-end $100 
C) No-name $50;High-end $90 
D) ​No-name $60;High-end $90 
A) ​No-name $60;High-end $100 
B) No-name $50;High-end $100 
C) No-name $50;High-end $90 
D) ​No-name $60;High-end $90

Question 20

​Many bars close to campuses have started offering cheaper beer to consumers with a student IDs.These bars are using

Accepted Answer

A) ​Direct price discrimination 
B) Indirect price discrimination 
C) Decreasing returns to scale 
D) ​None of the above 
A) ​Direct price discrimination 
B) Indirect price discrimination 
C) Decreasing returns to scale 
D) ​None of the above

Exam 12: Direct Price Discrimination

​Amusement parks often offer coupons to the local market that are not available to tourists.This is an example of

​For direct price discrimination to work

​The idea behind price discrimination is

​Use the following table for question -​If the groups are equal size and the firm can only set one price,how should the firm price the high-end wok?

​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

​The strategy of sorting customers into high or low value based on the amount of sales made is known as the

​Charging prices closer to what consumers are willing to pay for a good

​Use the following table for question -Given that the firm wants to sell both the versions,how high can the no-name brand be priced?​

​Many bars close to campuses have started offering cheaper beer to consumers with a student ID.These bars

​Use the following table for question -​Given that the firm wants to sell both the versions,how high can the high-end professional knives be priced?

​For a retailer buying from a wholesaler,volume discounts do not violate the Robinson-Patman act because

​A supermarket sells you a pound of coffee on the condition that you buy a gallon of milk.This is an example of

​Use the following table for question -Given that the firm offers both the products would the chefs ever pay the full $100 for the high-end wok​

​For direct price discrimination to work effectively

​Which of the following is FALSE about indirect price discrimination

​Use the following table for question -​What is the maximum that the firm can charge for the no-name brand wok without losing customers?

​Hardcover Books The marginal cost of printing a typical hard cover novel is $12.00 while the same book in paperback has a marginal cost of $2.00 lower.So why do publishers charge an average of $15 more for hard cover books?

​Use the following table for question -​In this case the firm should

​Use the following table for question -Given that the firm offers both the products,what prices can it offer to motivate the two groups to profitably self-sort into buying the correct brand​

​Many bars close to campuses have started offering cheaper beer to consumers with a student IDs.These bars are using

The One Lessor of Business

Benefits, Costs, and Decisions

Extent How Much Decisions

Investment Decisions: Look Ahead and Reason Back

Simple Pricing

Economies of Scale and Scope

Understanding Markets and Industry Changes

Market Structure and Long Run Equilibrium

Strategy: the Quest to Keep Profit From Eroding

Foreign Exchange, Trade, and Bubbles

More Realistic and Complex Pricing

Strategic Games

Bargaining

Making Decisions With Uncertainty

Auctions

The Problem of Adverse Selection

The Problem of Moral Hazard

Getting Employees to Work in the Firms Best Interest

Getting Divisions to Work in the Firms Best Interest

Managing Vertical Relationships

Filters

Amusement parks often offer coupons to the local market that are not available to tourists.This is an example of

For direct price discrimination to work

The idea behind price discrimination is

Use the following table for question -If the groups are equal size and the firm can only set one price,how should the firm price the high-end wok?

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

The strategy of sorting customers into high or low value based on the amount of sales made is known as the

Charging prices closer to what consumers are willing to pay for a good

Use the following table for question -Given that the firm wants to sell both the versions,how high can the no-name brand be priced?

Many bars close to campuses have started offering cheaper beer to consumers with a student ID.These bars

Use the following table for question -Given that the firm wants to sell both the versions,how high can the high-end professional knives be priced?

For a retailer buying from a wholesaler,volume discounts do not violate the Robinson-Patman act because

A supermarket sells you a pound of coffee on the condition that you buy a gallon of milk.This is an example of

Use the following table for question -Given that the firm offers both the products would the chefs ever pay the full $100 for the high-end wok

For direct price discrimination to work effectively

Which of the following is FALSE about indirect price discrimination

Use the following table for question -What is the maximum that the firm can charge for the no-name brand wok without losing customers?

Hardcover Books The marginal cost of printing a typical hard cover novel is $12.00 while the same book in paperback has a marginal cost of $2.00 lower.So why do publishers charge an average of $15 more for hard cover books?

Use the following table for question -In this case the firm should

Use the following table for question -Given that the firm offers both the products,what prices can it offer to motivate the two groups to profitably self-sort into buying the correct brand

Many bars close to campuses have started offering cheaper beer to consumers with a student IDs.These bars are using