Price discriminationOA. is the practice of giving preferential treatment to certain groups of customers based on their long - standing relationship to the producer.OB. is the practice of charging different prices to different customers based on the different costs of supplying the product to different customers.OC. is the practice of charging different prices to different customers when the price differences cannot be attributed to variations in cost.OD. is the practice of charging different prices to different customers based on a sellers' personal preferences and prejudices.

The objective of the question is to identify the correct definition of price discrimination among…

Answered: Price discrimination OA. is the…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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33. Rodrigo gets a $1.00 discount by buying Cheerios on the end of the aisle that have a store coupon. Olivia buys the same sized Cheerios at the regular price in the cereal section. Is this price discrimination? True False
Superior Trading Co. operates in a competitive market, and decides which price to charge their customers based on Othe cost of producing the product Othe profit Superior Trading Co. wants to achieve Othe market price charged by Superior Trading Co.'s competitors Othe price set by the government
Which of the following is NOT one of the three steps to take in segmenting customers into groups? O Charge higher prices to groups with more elastic demand. Divide the consumers into groups whose demand differs. Give discounts to chosen groups based on identifiable characteristics. Base discounts on characteristics that are hard to change.
Conditions for price discrimination Price discrimination is the practice of selling the same good at more than one price when the price differences are not justified by cost differences. Evaluate the following statement: "Price discrimination is not possible when a good is sold in a perfectly competitive market." False, because perfectly competitive firms do not profit - maximize by setting marginal revenue equal to marginal cost True, because perfectly competitive firms have no market power False, because perfectly competitive firms have market power None of these choices Examples of price discrimination Cho and Ginny are debating the use of coupons by grocery stores. Cho says, "The use of coupons in grocery stores represents a means of price discrimination. It's pure and simple. Coupons do reduce the price of groceries, but mostly to people who are less likely to buy at the full price." By contrast, Ginny contends, "Coupons do not constitute price discrimination. They simply…
The graph below shows the demands and marginal revenue in two markets, 1 and 2, for a price discriminating firm along with total marginal revenue, MRT, and marginal cost: Price and cost (dollars) 100 80 60 AS 40 20 0 200 100 300 MR1 400 MR2 MC 500 Quantity How should the firm allocate sales between the two markets? 600 D₁ 700 MRT 800 900 D₂ 1000 Q
Students were able to obtain these tickets, make fictitious reservations, cancel the reservations at the last minute, and secure a seat on the flight at a discounted price. Answer the following questions. 1. Is this a form of price discrimination? Why? Include in your analysis differing levels of elasticity, if relevant, and any other feature 2. Why would an airline use this practice? Provide a dollar and cents example. 3. The airlines caught up with this scheme, what principal of price discrimination did the students violate so as to end it?
The publisher of a magazine gives his staff the following information: Current price Current sales Current revenue Current total costs $2.00 per issue 150,000 copies per month $300,000 per month $450,000 per month He tells the staff, "Our costs are currently $150,000 more than our revenues each month. I propose to eliminate this problem by raising the price of the magazine to $3.00 per issue. This will result in our revenue being exactly equal to our cost." Refer to the table above, which of the following statements is correct? The publisher's analysis is correct only if the demand is elastic. The publisher's analysis is correct only if the demand is perfectly elastic. The publisher's analysis is correct only if the demand is unit elastic. The publisher's analysis is correct only if the demand is perfectly inelastic.
Airlines charge a lower price to people who buy their tickets two weeks in advance than they do to people who buy their tickets two days in advance. Explain why. On the other hand, Broadway theaters charge a lower price to people who buy a ticket just before the show begins that to people who buy their tickets weeks in advance. Explain the difference.
The widget market is competitive and includes no transaction costs. Five suppliers are willing to sell one widget at the following prices: $20, $12, $8, $4, and $2 (one seller at each price). Five buyers are willing to buy one widget at the following prices: $8, $12, $20, $32, and $44 (one buyer at each price). For each price shown in the following table, use the given information to enter the quantity demanded and quantity supplied. Price Quantity Demanded Quantity Supplied ($ per widget) (widgets) (widgets) $2 $4 $8 $12 $20 $32 $44 In this market, the equilibrium price will be______ per widget, and the equilibrium quantity will be ___ (#) widgets.
The widget market is competitive and includes no transaction costs. Five suppliers are willing to sell one widget at the following prices: $26, $14, $10, $5, and $3 (one seller at each price). Five buyers are willing to buy one widget at the following prices: $10, $14, $26, $34, and $42 (one buyer at each price). For each price shown in the following table, use the given information to enter the quantity demanded and quantity supplied. Price Quantity Demanded Quantity Supplied ($ per widget) (widgets) (widgets) $3 $5 $10 $14 $26 $34 $42 In this market, the equilibrium price will be per widget, and the equilibrium quantity will be widgets.
Imagine you are the owner of the Omaha Surfboard Company. You have a branch in Omaha and in Long Beach CA. After some market research you find the following surfboard demand for each market, Omaha Demand: Qo = 1000 – 10P Long Beach Demand: QL = 1000 – 5P Combined/Total Demand: Q = 2000 – 15P Your marginal cost is constant at $40. a. Find your price and quantity if you treated the market as a single entity with a single price. What is your profit? (Hint: find Marginal Revenue and set equal to MC) b. If you treat each market separately, what is P and Quantity in each market, and final profit?
Suppose you own a tax preparation services company, with fixed costs of $3,000/month and marginal costs of $25/appt.If the price is $60/appt, 500 appointments would be sold. If the price is $50/appt, 760appointments would be sold. a.)Use these figures to calculate the price elasticity of demand for your services. b.)Calculate the monthly profits and profit margins (profit/revenue) associated with the price of $60/appt and $50/appt. c.)Given these calculations, what price should you charge for your services, $50/apptor $60/appt? Explain

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