By focusing the customers on the price of a product, you make:
a. the demand for the product more inelastic
b. the customers less price sensitive to the product
c. the demand for the product more elastic
d. only B&C correct answers c. the demand for the product more elastic
large amusement p...
UNC MBA 650 Final Exam || Already Passed.
By focusing the customers on the price of a product, you make:
a. the demand for the product more inelastic
b. the customers less price sensitive to the product
c. the demand for the product more elastic
d. only B&C correct answers c. the demand for the product more elastic
large amusement parks charge entrance fees rather than fee per ride because:
a. customers are more sensitive to paying a fee per ride
b. customers are less sensitive to paying a fee per ride
c. customers view paying per ride as a smaller cost
d. none of the above correct answers a. customers are more sensitive to paying a fee per ride
A local restaurant increases the prices on its burgers as soon as it begins a promotional
campaign. Which of the following is likely to be true?
a. the promotional campaign featured how much better their burgers are
b. the promotional campaign focused on the value per dollar
c. the promotional campaign made demand more elastic
d. all of the above correct answers a. the promotional campaign featured how much better their
burgers are
Firms can practice indirect price discrimination by
a. Offering volume discounts
b. Using two-part pricing
c. Offering a bundle containing a number of units
d. All of the above correct answers d. all of the above
for direct price discrimination to work, the firm
a. must be able to identify members of the low value group
b. charge the low value group lower prices than the rest
c. prevent the low value group from reselling their low priced goods to higher valued group
d. all of the above correct answers d. all of the above
for a retailer buying from a wholesaler, volume discounts do not violate the Robinson-Patman
act because
a. to sell larger volumes, the retailer himself has to offer discounts
b. to sell larger volumes, the retailer has to incur costs in promoting the item
c. to sell larger volumes, the retailer has to hold the items in inventory longer
d. all of the above correct answers d. all of the above
firm X owns both a grocery store and the parking lot outside the grocery store. In order to
increase the traffic at the store it must
a. decrease the prices on the goods sold in the store
b. decrease the parking rates
c. all of the above
,d. none of the above correct answers c. all of the above
When deciding what price to charge customers, a firm may choose to charge different prices
based on the customers'
a. age
b. willingness to pay
c. location
d. all of the above correct answers d. all of the above
Carving knives
Home users
Professional Chefs
No-name brand
$40
$70
High-end professional series
$60
$130
How much would the firm make in revenue if it prices both its products successfully?
a. $110
b. $120
c. $130
d. $14 correct answers d. $140
The Robinson-Patman Act
a. is a part of the antitrust laws
b. makes it illegal to give a price discount on a good sold to another business
c. is also known as the Anti-Chain-Store Act
d. all of the above correct answers d. all of the above
Which of the following is FALSE about indirect price discrimination
a. the firm is able to identify each customer's willingness to pay
b. the firm is able to charge different prices to the different value customers
c. the firm is able to prevent arbitrage
d. all of the above correct answers a. the firm is able to identify each customer's willingness to
pay
When a grocery store offers discount coupons in Sunday papers, it is trying to
a. price discriminate
b. undercut its competition
c. reward the frequent readers
d. provide a social service correct answers a. price discriminate
Which of the following is an example of the "damaged goods" strategy
a. a doll company selling dolls at cost but charging high margins on dol accessories
b. a cell phone company offers free locked in phones but charges high prices per call
,c. a catering company pays its chefs higher wages to make sure that the bargain meals are just
slightly burnt
d. none of the above correct answers c. a catering company pays its chefs higher wages to make
sure that the bargain meals are just slightly burnt
for direct price discrimination to work
a. the firm must be able to identify the members of the low value group
b. the firm must charge a single price to all its customers
c. the firm need not worry about any arbitrage since all its customers are charged the same price
d. the firm should charge a higher price to those customers with the most elastic demand correct
answers a. the firm must be able to identify the members of the low value group
which of the following is FASE?
a. to reduce cannibalization among products, make the products more homogenous
b. after acquiring a substitute product, raise prices on both the products
c. after acquiring a complementary product, lower prices on both the products
d. all of the above correct answers a. to reduce cannibalization among products, make the
products more homogenous
The general rule to increase profits when two close substitute brands are jointly owned is
a. increase prices for both brands
b. decrease prices for both brands
c. increase prices on one brand, decreasing it for the other
d. increase prices on one brand, keeping the prices of the second brand constant correct answers
a. increase prices for both brands
For direct price discrimination to work effectively
a. the low valued customers should not be able to engage in arbitrage
b. you need to charge the same price to the different groups
c. both groups should have the same elasticity of demand
d. none of the above correct answers a. the low valued customers should not be able to engage in
arbitrage
You are the owner of an art supply store, selling both paint and paintbrushes. In order to
maximize total sales you should
a. decrease the price of the paint only
b. decrease the price on paintbrushes only
c. decrease the price on both the paint and the paintbrushes
d. increase the price on both the paint and the paintbrushes correct answers c. decrease the price
on both the paint and the paintbrushes
Cooking Wok
Value to home users
Value to professional Chefs
No-name brand
$50
, $60
High-end professional series
$70
$100
Given that the firm offers both the products, what prices can it offer to motivate the two groups
to profitably self-sort into buying the correct brand
a. No-name $60; High-end $100
b. No-name $50; High-end $100
c. No-name $50; High-end $90
d. No-name $60; High-end $90 correct answers c. No-name $50; High-end $90
For a cruise liner deciding how to price its rooms, if the cost of overpricing is higher than the
cost of underpricing, then the management of the cruise liner should
a. price lower than what they expect would fill capacity
b. price higher than what they expect would fill capacity
c. price such that they would expect to just fill capacity
d. none of the above correct answers a. price lower than what they expect would fill capacity
A firm practicing direct price discrimination will charge a higher price to
a) Consumers with an elastic demand
b) All consumers
c) Consumers with an inelastic demand
d) Consumers with unitary elastic demand correct answers a. consumers with an elastic demand
Amusement parks often offer coupons to the local market that are not available to tourists. This
is an example of
a. Direct discrimination scheme
b. Indirect discrimination scheme
c. Both of the above
d. None of the above correct answers B. indirect discrimination scheme
A firm practicing direct price discrimination will charge a higher price to
a. Consumers known to have an elastic demand
b. All consumers
c. Consumers known to have an inelastic demand
d. Consumers known to have a unitary elastic demand correct answers c. consumers known to
have an inelastic demand
Movie theatres offer seniors discounts because
a.Seniors have a more inelastic demand for movie tickets
b. Seniors have a more elastic demand for movie tickets
c. Seniors have a higher opportunity cost of their time
d. Only B&C correct answers B. seniors have a more elastic demand for movie tickets
under the non-strategic view of bargaining, the terms of agreement are determined by
a. the rules of the game
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