Microeconomics
13th Edition
ISBN: 9781337617406
Author: Roger A. Arnold
Publisher: Cengage Learning
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Chapter 10, Problem 13QP
To determine
The reason for coupons that tend to be more common on small-ticket items than big-ticket items.
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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.
Does paperless ticketing benefit consumers more than traditional ticketing that allows tickets to be resold? Explain.
What if a new restaurant entry increased consumer elasticity of demand for the sushi appetizer from 2 to 3? The price you charge initially was $10. By how much do you have to adjust the price? Will you still be able to make a profit?
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Chapter 10 Solutions
Microeconomics
Ch. 10.1 - Prob. 1STCh. 10.1 - Prob. 2STCh. 10.1 - Prob. 3STCh. 10.3 - Prob. 1STCh. 10.3 - Prob. 2STCh. 10.3 - Prob. 3STCh. 10.3 - Prob. 4STCh. 10.5 - Prob. 1STCh. 10.5 - Prob. 2STCh. 10.5 - Prob. 3ST
Ch. 10 - Prob. 1QPCh. 10 - Prob. 2QPCh. 10 - Prob. 3QPCh. 10 - Is there a deadweight loss if a firm produces the...Ch. 10 - Prob. 5QPCh. 10 - Prob. 6QPCh. 10 - Prob. 7QPCh. 10 - Prob. 8QPCh. 10 - Prob. 9QPCh. 10 - Prob. 10QPCh. 10 - Prob. 11QPCh. 10 - Prob. 12QPCh. 10 - Prob. 13QPCh. 10 - Prob. 14QPCh. 10 - Prob. 1WNGCh. 10 - Prob. 2WNGCh. 10 - Prob. 3WNGCh. 10 - Prob. 4WNGCh. 10 - Prob. 5WNGCh. 10 - Prob. 6WNG
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- Elasticity in the real world—sort of. The managers of a scholarly journal that I edit were thinking of raising the subscription prices. We used to charge individuals $32 for four issues per year and libraries $52 for the same. The managers proposed raising the prices to $45 and $75, respectively. My feeling was that these increases were too small, especially since the prices of substitutes (scholarly journals of a quality similar to ours) were much higher. I suggested that we charge $50 and $85, respectively. I believed that was more sensible, since the demand is quite inelastic over this price range, so with a larger price increase our total revenue would rise further. Apparently the managers agreed, and we raised our prices by the larger amount. Next year our revenue rose, suggesting that my guess about the elasticity of demand was correct. Why do you think the journal charges different prices to libraries? Do individuals have a higher or lower elasticity of demand than libraries?…arrow_forwardSuppose that a new restaurant entry increased consumer elasticity of demand for the sushi appetizer from 2 to 3. The price you charge initially is $10. By how much will you have to adjust the price? Will you still be able to make profit?arrow_forwardRefer to Example 10.3 - 'Markup Pricing: Supermarkets to Designer Jeans' a. Why do small convenience stores which are often open 24-7 typically charge higher prices than supermarkets? b. Why are designer label jeans typically more expensive than 'mass-market' jeans?arrow_forward
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- An end-of-aisle price promotion changes the price elasticity of a good from -2 to -3. Suppose the normal price is $33 , which equates marginal revenue with marginal cost at the initial elasticity of -2. What should the promotional price be when the elasticity changes to -3 ? ( Hint : In other words, what price will equate marginal revenue and marginal cost?) a) $ 30.60 b) $25.50 c) $33.15 d)$ 35.70arrow_forwardHow will you recall price? List five other words that mean the same thing as price. Compare and contrast fixed and variable costs and give an example of each. Explain market-skimming and market-penetration pricing strategies. Why marketers of innovative high-tech products choose market-skimming pricing rather than market-penetration pricing when launching a new product? Justify your answer.arrow_forwardDemand for Corn Flakes is: P = 24- Q. Supply of Kellogg's Corn Flakes is: P = 2+ Q. Now a generic company enters the market, selling geneen Corn Flakes for $7. Assume consumers are indifferent between generic and Kellogg's Cororlakes. How many boxes of Kellogg's (brand) Corn Flakes will sell? Enter as a value.arrow_forward
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