Exam 16: Pricing Strategy

The Toronto Maple Leafs were offering hockey fans the chance to purchase equity seat rights in order to guarantee season ticket seats and prices for home games.This is an example of

Consider three pricing strategies that the firm can pursue: a)optimal two-part tariff pricing b)perfect price discrimination c)single-price monopoly pricing Of these three strategies, which is most beneficial to society as a whole?

Both first-degree price discrimination and optimal two-part tariff pricing maximize economic surplus.

Compared to monopoly pricing, an optimal two-part tariff

Yield management is the practice of

Figure 16.4 -Refer to Figure 16.4.Suppose the firm represented in the diagram decides to use a two-part pricing strategy such that it charges a fixed fee and a per-unit price equal to the monopoly price.What is the profit earned under this pricing scheme?

If a firm charges different consumers different prices for the same product and the difference cannot be attributed to cost variations, then it is engaging in

Price discrimination became legal in Canada in

What is odd pricing? Why do some merchants use odd pricing?

Which of the following is not an advantage cost-plus pricing?

Some consumer electronic products such as plasma TVs, DVD players and digital cameras, are introduced at very high prices but over time, their prices start falling (beyond what could be attributed to falling costs as companies take advantage of economies of scale and cheaper technologies).Which of the following is the best explanation for this observation?

In January of 2014, Rogers cable was offering new customers cable TV, internet access, and a PVR, for $19.95 a month.Renting just a PVR from Roger's would cost existing customers $25.07 a month.What can you conclude about the price elasticity of demand for Rogers cable TV, internet access, and PVR rental?

Successful price discrimination cannot take place if

Why is price discrimination legal but not discrimination based on race or gender?

What is perfect price discrimination and why do economists believe that no firm is able to practice perfect price discrimination?

Figure 16.4 -Refer to Figure 16.4.Suppose the firm represented in the diagram decides to use a two-part pricing strategy such that it charges a fixed fee and a per-unit price equal to the competitive price.(This is also called an optimal two-part tariff.)What is the per-unit price it should charge, if any?

If demand is taken into account, firms that use cost-plus pricing can adjust price by

In January of 2014, Rogers cable was offering new customers cable TV, internet access, and a PVR, for $19.95 a month.Renting just a PVR from Roger's would cost existing customers $25.07 a month.Is Rogers engaging in price discrimination, and if so, why?

Figure 16.2 Plato Playhouse, a theatre company in the university town of Wegg, caters to two groups of customers: students and the non-student population. Figure 16.2 shows the demand curves for the two groups of customers. -Refer to Figure 16.2.What is the price charged in the two markets?

If universities were to use yield management techniques, they would increase scholarship offers to students likely to be more price sensitive and they would reduce scholarship offers to students likely to be less price sensitive.