Question 1

Which of the following pricing strategies allows a firm to earn economic profit?

Accepted Answer

A)  price discrimination 
B)  charging a price equal to marginal cost 
C)  charging a price equal to the average total cost of production 
D)  charging a price equal to the average variable cost of production 
A)  price discrimination 
B)  charging a price equal to marginal cost 
C)  charging a price equal to the average total cost of production 
D)  charging a price equal to the average variable cost of production

Question 2

If a firm could practice perfect price discrimination,it would

Accepted Answer

A)  allow resale of its product. 
B)  charge every buyer a different price. 
C)  charge a price based on the quantity of a product bought. 
D)  use odd pricing. 
A)  allow resale of its product. 
B)  charge every buyer a different price. 
C)  charge a price based on the quantity of a product bought. 
D)  use odd pricing.

Question 3

Calling long distance is often more expensive on weekdays between 8 am and 5 pm than in the evening hours.Why is this the case?

Accepted Answer

A)  Telephone companies hope to discourage customers from calling long distance during the day to keep their labor costs down. 
B)  The cost of making long-distance connections is higher during the day than in the evenings. 
C)  Businesses who must call suppliers or customers during business hours have few alternatives and therefore have an inelastic demand during the workday compared to after-work hours. 
D)  Increasingly, businesses who must call suppliers or customers during business hours resort to the internet, thereby reducing demand for long-distance calls. To make up for this fall in demand, telephone companies charge higher rates. 
A)  Telephone companies hope to discourage customers from calling long distance during the day to keep their labor costs down. 
B)  The cost of making long-distance connections is higher during the day than in the evenings. 
C)  Businesses who must call suppliers or customers during business hours have few alternatives and therefore have an inelastic demand during the workday compared to after-work hours. 
D)  Increasingly, businesses who must call suppliers or customers during business hours resort to the internet, thereby reducing demand for long-distance calls. To make up for this fall in demand, telephone companies charge higher rates.

Which of the following pricing strategies allows a firm to earn economic profit?

If a firm could practice perfect price discrimination,it would

Calling long distance is often more expensive on weekdays between 8 am and 5 pm than in the evening hours.Why is this the case?

Economics: Foundations and Models

Trade-Offs, comparative Advantage, and the Market System

Where Prices Come From: the Interaction of Demand and Supply

Economic Efficiency, government Price Setting, and Taxes

Externalities, environmental Policy, and Public Goods

Elasticity: The Responsiveness of Demand and Supply

The Economics of Health Care

Firms, the Stock Market, and Corporate Governance

Comparative Advantage and the Gains From International Trade

Consumer Choice and Behavioral Economics

Technology, production, and Costs

Firms in Perfectly Competitive Markets

Monopolistic Competition: the Competitive Model in a More Realistic Setting

Oligopoly: Firms in Less Competitive Markets

Monopoly and Antitrust Policy

The Markets for Labor and Other Factors of Production

Public Choice,taxes,and the Distribution of Income

Filters

Exam 16: Pricing Strategy

Which of the following pricing strategies allows a firm to earn economic profit?

If a firm could practice perfect price discrimination,it would

Calling long distance is often more expensive on weekdays between 8 am and 5 pm than in the evening hours.Why is this the case?

Economics: Foundations and Models

Trade-Offs, comparative Advantage, and the Market System

Where Prices Come From: the Interaction of Demand and Supply

Economic Efficiency, government Price Setting, and Taxes

Externalities, environmental Policy, and Public Goods

Elasticity: The Responsiveness of Demand and Supply

The Economics of Health Care

Firms, the Stock Market, and Corporate Governance

Comparative Advantage and the Gains From International Trade

Consumer Choice and Behavioral Economics

Technology, production, and Costs

Firms in Perfectly Competitive Markets

Monopolistic Competition: the Competitive Model in a More Realistic Setting

Oligopoly: Firms in Less Competitive Markets

Monopoly and Antitrust Policy

The Markets for Labor and Other Factors of Production

Public Choice,taxes,and the Distribution of Income

Filters