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 8MC
To determine
Arbitrage.
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Which of the following is a necessary condition for price discrimination?
Group of answer choices
a. Buyers are aware of prices charged to other buyers.
b. The seller is a perfectly competitive firm.
c. Buyers have identical elasticities of demand.
d. Resale of the product or service is possible.
e. The seller can separate consumers according to their elasticities of demand.
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 needed for price discrimination?
Select one:
a. The company has market power in its product market.
b. The company can keep customers from reselling the product after they have purchased it.
c. The company has a perfectly elastic demand curve.
d. The company knows how much different customers are willing to pay for the product
Chapter 14 Solutions
Managerial Economics: A Problem Solving Approach
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Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.Similar questions
- Price discrimination is the practice of selling goods at different prices to different consumers. The most common form of price discrimination is the practice of selling goods to different groups of customers at different prices. Many businesses offer students and senior citizens discounts not available to other customers. Firms engage in price discrimination in an effort to increase their profits. a. Identify three conditions that must be met for price discrimination to occur. b. Discuss the effectiveness of different strategies implemented to deal with the problems caused by increased road transport use in urban areas. c. 'Transportation patterns in Jamaica reflect the flow of people and commerce'. Discuss the significance of this statement highlighting the implications for the country as the government attempts to develop a first-world transportation system.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 are pricing tactics and examples? What are some forms of price discriminations?arrow_forward
- 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.arrow_forwardWhich of the following is not an example of price discrimination? a. Senior citizen discount at the movies b. Grocery coupons c. Shipping a package further costs more d. Charging a higher price for ice-cream during the summer and a lower price in the winterarrow_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_forward
- The practice of posting a discrete schedule of declining prices for different ranges of quantities. Select one: a. First-degree price discrimination b. Fourth degree price discrimination c. Third-degree price discrimination d. Fifth degree price discrimination e. Second-degree price discrimination.arrow_forwardwhy price discrimination is profitable in the perfume market or industry ?arrow_forward33. 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 Falsearrow_forward
- Price discrimination by a monopolist refers tocharging different prices based ona. the consumer’s willingness to pay.b. the consumer’s racial or ethnic group.c. the cost of producing the good for a particularconsumer.d. whether the consumer is likely to become arepeat buyerarrow_forwardHow does price discrimination help customers?arrow_forwardWhich of the below is NOT an example of price discrimination? a. A store that offers a senior’s discount on Thursdays. b. A fast-food restaurant sending coupons to the public. c. A grocery store that offers better pricing if the customer buys in bulk. d. Competing grocery stores have different prices for milk.arrow_forward
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