Managerial Economics: A Problem Solving Approach
5th Edition
ISBN: 9781337106665
Author: Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Publisher: Cengage Learning
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Chapter 14, Problem 2MC
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Which of the following is not a requirement for a successful price discrimination strategy?
A. A firm must have market power
B. The firm must be able to prevent consumers who buy a product at a low price from reselling it to other consumers at a high price.
C. Some consumers must have greater willingness to pay for the product than other consumers, and the firm must be able to know what prices consumers are willing to pay
D. The good must be a very expensive good
Which of the following is NOT a condition necessary for price discrimination?
a.The product cannot be resold to another customer.
b. the product must be a durable good
c. the seller must have some market power
d. The price elasticities of demand are different for each group of consumers.
Which of the following is necessary for a firm to practice price discrimination?
Group of answer choices
a. The firm is a member of a cartel.
b. The demand curve for the product is perfectly inelastic.
c. The firm can prevent resale of its goods.
d. The government strictly enforces antitrust laws.
e. The demand curve for the product is perfectly elastic.
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Managerial Economics: A Problem Solving Approach
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- 1. Which of the following statements regarding price discrimination is false? In order to capture more surplus, the firm must have some market power. The firm must have some information about the different amounts people will pay for the product. The firm must be able to prevent resale. The firm must be able accurately forecast total sales.arrow_forwardThe following are the necessary conditions which must be fulfilled for the implementation of price discrimination except for ______ a. there should be no arbitrage b. the market must be divided into sub-markets with different elasticities of demand c. the good or service in question should not be resaleable d. the market must be divided into sub-markets with different elasticities of supplyarrow_forwardWhat is "third-degree price discrimination" and how is it applied in markets? A) Charging different prices based on the quantity purchased. B) Charging different prices to different consumer groups based on their elasticities of demand. C) Charging a uniform price to all consumers regardless of their willingness to pay. D) Offering discounts to consumers who purchase bundles of goods.arrow_forward
- Which of the following is NOT an example of the hurdle method of price discrimination? O Bundling to get a second good at a lower price. O Offering different versions of a product that sell for different prices. O Segmenting the market into identifiable groups with different prices. O Making customers put extra effort to get a lower price on a product.arrow_forward(1) what is an example of price discrimination that you have experienced ? is this price diesccrimination beneficial to consumers ? why yes or why no?arrow_forwardPrice discrimination leads to higher price for all consumer . True or falsearrow_forward
- Microsoft selling Excel and Word together while allowing customers to buy the two products separately is an example of: A. a mixed bundle. B. nonlinear price discrimination. C. a requirement tie-in sale. D. a pure bundle.arrow_forwardIn advertising, a business is not only making consumers aware of the existence of the product and its positive features but is purposely trying to persuade consumers to purchase the product. As a piece of economics which of the following best characterises what advertisers are trying to do? (a) Shift the demand curve to the right and make it more income elastic; (b) Shift the demand curve to the right and make it less income elastic; (c) Shift the demand curve to the right and make it less price elastic; (d) Shift the demand curve to the right and make it more price elastic.arrow_forwardPrice discrimination is one of the features of which type of the market economy?arrow_forward
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