Question 1

When a movie theater charges a higher price during the evening than during the day,it is practicing:

Accepted Answer

A)  peak load pricing. 
B)  first-degree price discrimination. 
C)  second-degree price discrimination. 
D)  third-degree price discrimination 
E)  fourth-degree price discrimination. 
A)  peak load pricing. 
B)  first-degree price discrimination. 
C)  second-degree price discrimination. 
D)  third-degree price discrimination 
E)  fourth-degree price discrimination.

Question 2

When an electrical utility charges higher prices during the day than at night,it is practicing:

Accepted Answer

A)  peak load pricing. 
B)  first-degree price discrimination. 
C)  second-degree price discrimination. 
D)  third-degree price discrimination. 
E)  fourth-degree price discrimination. 
A)  peak load pricing. 
B)  first-degree price discrimination. 
C)  second-degree price discrimination. 
D)  third-degree price discrimination. 
E)  fourth-degree price discrimination.

Question 3

If the monopolist shown in the following figure could practice first-degree price discrimination,the consumer surplus would be:

Accepted Answer

A)  $0. 
B)  $225. 
C)  $450. 
D)  $900. 
E)  $1,200. 
A)  $0. 
B)  $225. 
C)  $450. 
D)  $900. 
E)  $1,200.

Question 4

When a monopolist requires a customer to pay an initial fee for the right to buy a product as well as a usage fee for each unit of the product bought,this is known as a(n):

Accepted Answer

A)  bundling contract. 
B)  price differentiation. 
C)  oligopolistic device. 
D)  two-part tariff. 
E)  maximizing device. 
A)  bundling contract. 
B)  price differentiation. 
C)  oligopolistic device. 
D)  two-part tariff. 
E)  maximizing device.

Question 5

Crusty Cakes sells donuts in Eastown and Westown.Its total costs are given by TC = 10(QE + QW).The demand in each neighborhood is given by QE = 100 - 2PE and QW = 100 - PW .If Crusty price discriminates between the two neighborhoods,how much are its maximized profits?

Accepted Answer

A)  $850. 
B)  $1,200. 
C)  $2,475. 
D)  $2,825. 
E)  $3,250. 
A)  $850. 
B)  $1,200. 
C)  $2,475. 
D)  $2,825. 
E)  $3,250.

Question 6

If a firm supplies separable markets with price elasticities $\eta$1 = -3 and $\eta$2 = -2,it should set prices P1 and P2 so that:

Accepted Answer

A)  P1 = P2. 
B)  3P1 = 2P2. 
C)  2P1 = 3P2. 
D)  2/3P1 = 1/2P2. 
E)  2P1 = 2/3P2. 
A)  P1 = P2. 
B)  3P1 = 2P2. 
C)  2P1 = 3P2. 
D)  2/3P1 = 1/2P2. 
E)  2P1 = 2/3P2.

Question 7

The demand for health club services is Q = 100 - 2P,and the marginal cost of providing these services is MC = -110 + 2Q.If a two-part tariff pricing system is used,what is the optimal fixed fee?

Accepted Answer

A)  1,555. 
B)  2,624. 
C)  1,024. 
D)  1,206. 
E)  None of the above. 
A)  1,555. 
B)  2,624. 
C)  1,024. 
D)  1,206. 
E)  None of the above.

When a movie theater charges a higher price during the evening than during the day,it is practicing:

When an electrical utility charges higher prices during the day than at night,it is practicing:

If the monopolist shown in the following figure could practice first-degree price discrimination,the consumer surplus would be:

When a monopolist requires a customer to pay an initial fee for the right to buy a product as well as a usage fee for each unit of the product bought,this is known as a(n):

Crusty Cakes sells donuts in Eastown and Westown.Its total costs are given by TC = 10(Q_E + Q_W).The demand in each neighborhood is given by Q_E = 100 - 2P_E and Q_W = 100 - P_W.If Crusty price discriminates between the two neighborhoods,how much are its maximized profits?

If a firm supplies separable markets with price elasticities $\eta$ ₁ = -3 and $\eta$ ₂ = -2,it should set prices P₁ and P₂ so that:

The demand for health club services is Q = 100 - 2P,and the marginal cost of providing these services is MC = -110 + 2Q.If a two-part tariff pricing system is used,what is the optimal fixed fee?

Introduction

Demand Theory

Consumer Behavior and Rational Choice

Estimating Demand Functions

Production Theory

The Analysis of Costs

Perfect Competition

Monopoly and Monopolistic Competition

Bundling and Intrafirm Pricing

Oligopoly

Game Theory

Auctions

Risk Analysis

Principalagent Issues and Managerial Compensation

Adverse Selection

Government and Business

Optimization Techniques

Appendix Problems

Filters

Exam 9: Managerial Use of Price Discrimination

When a movie theater charges a higher price during the evening than during the day,it is practicing:

When an electrical utility charges higher prices during the day than at night,it is practicing:

If the monopolist shown in the following figure could practice first-degree price discrimination,the consumer surplus would be:

When a monopolist requires a customer to pay an initial fee for the right to buy a product as well as a usage fee for each unit of the product bought,this is known as a(n):

Crusty Cakes sells donuts in Eastown and Westown.Its total costs are given by TC = 10(QE + QW).The demand in each neighborhood is given by QE = 100 - 2PE and QW = 100 - PW .If Crusty price discriminates between the two neighborhoods,how much are its maximized profits?

If a firm supplies separable markets with price elasticities η\etaη 1 = -3 and η\etaη 2 = -2,it should set prices P1 and P2 so that:

The demand for health club services is Q = 100 - 2P,and the marginal cost of providing these services is MC = -110 + 2Q.If a two-part tariff pricing system is used,what is the optimal fixed fee?

Introduction

Demand Theory

Consumer Behavior and Rational Choice

Estimating Demand Functions

Production Theory

The Analysis of Costs

Perfect Competition

Monopoly and Monopolistic Competition

Bundling and Intrafirm Pricing

Oligopoly

Game Theory

Auctions

Risk Analysis

Principalagent Issues and Managerial Compensation

Adverse Selection

Government and Business

Optimization Techniques

Appendix Problems

Filters

Crusty Cakes sells donuts in Eastown and Westown.Its total costs are given by TC = 10(Q_E + Q_W).The demand in each neighborhood is given by Q_E = 100 - 2P_E and Q_W = 100 - P_W.If Crusty price discriminates between the two neighborhoods,how much are its maximized profits?

If a firm supplies separable markets with price elasticities $\eta$ ₁ = -3 and $\eta$ ₂ = -2,it should set prices P₁ and P₂ so that: