Question 1

A football stadium has a fixed number of seats.Given this,how should stadium management determine ticket prices?

Accepted Answer

A) When MRMC,price to fill capacity D) Both A&C A) When MRMC,price to fill capacity D) Both A&C D

Question 2

You own two different energy drink brands with similar elasticities: "Blue Cow" and "600 minute energy." If you reduce the price on "Blue Cow",you can only increase your total sales if

Accepted Answer

A) ​Prices for "600 minute energy" are increased 
B) Prices for "600 minute energy" are reduced 
C) Prices for "600 minute energy" stay constant 
D) ​None of the above 
A) ​Prices for "600 minute energy" are increased 
B) Prices for "600 minute energy" are reduced 
C) Prices for "600 minute energy" stay constant 
D) ​None of the above B

Question 3

​On average,if demand is unknown and costs of underpricing are _______ than the costs of overpricing,then err on the side of_________.

Accepted Answer

A) ​Smaller;overpricing 
B) Smaller;underpricing 
C) Larger;underpricing 
D) ​None of the above 
A) ​Smaller;overpricing 
B) Smaller;underpricing 
C) Larger;underpricing 
D) ​None of the above B

Question 4

​Which of the following is FALSE?

Accepted Answer

A) ​To reduce cannibalization among products,reposition a product so that it does not directly compete with the other 
B) After acquiring a substitute product,lower prices on both the products 
C) After acquiring a complementary product,lower prices on both the products 
D) ​All of the above 
A) ​To reduce cannibalization among products,reposition a product so that it does not directly compete with the other 
B) After acquiring a substitute product,lower prices on both the products 
C) After acquiring a complementary product,lower prices on both the products 
D) ​All of the above

Question 5

​Which of the following is TRUE?

Accepted Answer

A) ​To reduce cannibalization among products,reposition a product so that it does not directly compete with the other 
B) After acquiring a substitute product,lower prices on both the products 
C) After acquiring a complementary product,raise prices on both the products 
D) ​None of the above 
A) ​To reduce cannibalization among products,reposition a product so that it does not directly compete with the other 
B) After acquiring a substitute product,lower prices on both the products 
C) After acquiring a complementary product,raise prices on both the products 
D) ​None of the above

Question 6

A Swiss watch company advertises its history of superior craftsmanship.The company thinks that this will

Accepted Answer

A) ​Make the demand for the product more elastic 
B) Make the customers more sensitive to the price 
C) Not impact the demand for their product 
D) ​None of the above 
A) ​Make the demand for the product more elastic 
B) Make the customers more sensitive to the price 
C) Not impact the demand for their product 
D) ​None of the above

Question 7

​Firm X owns both a grocery store and the parking lot outside the grocery store.In order to increase the traffic at the store,the store should

Accepted Answer

A) ​Decrease the prices on the goods sold in the store 
B) Increase the parking rates 
C) All of the above 
D) ​None of the above 
A) ​Decrease the prices on the goods sold in the store 
B) Increase the parking rates 
C) All of the above 
D) ​None of the above

Question 8

​You are the owner of an art supply store,selling both paint and paintbrushes.In order to maximize total sales you should

Accepted Answer

A) ​Decrease the price on 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 
A) ​Decrease the price on 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

Question 9

​By focusing the customers on the price of a product,you make

Accepted Answer

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 
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

Question 10

​The pricing rule MR=MC holds for

Accepted Answer

A) ​All firms 
B) Single product firms 
C) Multiple product firms 
D) ​None of the above 
A) ​All firms 
B) Single product firms 
C) Multiple product firms 
D) ​None of the above

Question 11

​Wine Merger
In October,2014,Vintners Global Resource's (VGR)agreed to purchase M.A.Silva.VGR is a leading manufacturer of glass bottles and packaging for wines and M.A.Silva is a manufacturer of premium natural corks.What is the expected effect of this merger on price-cost margins?

Accepted Answer

These two companies' products are comple

Question 12

Firm A owns produces both toothpaste and toothbrushes.In order to increase profits the firm must​

Accepted Answer

A) ​Increase prices for both toothbrushes and toothpaste 
B) Decrease prices for both toothbrushes and toothpaste 
C) Increase prices on toothbrushes and increase the price on toothpaste 
D) ​Increase prices on toothbrushes but keep the price on toothpaste constant 
A) ​Increase prices for both toothbrushes and toothpaste 
B) Decrease prices for both toothbrushes and toothpaste 
C) Increase prices on toothbrushes and increase the price on toothpaste 
D) ​Increase prices on toothbrushes but keep the price on toothpaste constant

Question 13

​Firms tend to raise the price of their goods after acquiring a firm that sells a substitute because

Accepted Answer

A) ​They lose market power 
B) There is an increase in the overall demand for their products 
C) The bundle has a more elastic demand than individual goods 
D) ​The bundle has a more inelastic demand than individual goods 
A) ​They lose market power 
B) There is an increase in the overall demand for their products 
C) The bundle has a more elastic demand than individual goods 
D) ​The bundle has a more inelastic demand than individual goods

Question 14

Firms should lower the prices on their goods​

Accepted Answer

A) ​If the demand for the product is elastic 
B) If it acquires a firm selling a complement good 
C) If it acquires a firm selling a substitute good 
D) ​Both a and b 
A) ​If the demand for the product is elastic 
B) If it acquires a firm selling a complement good 
C) If it acquires a firm selling a substitute good 
D) ​Both a and b

Question 15

​If an ice-cream manufacturer acquires a frozen yogurt producer,you would likely see

Accepted Answer

A) ​Lower prices for both the ice cream and the frozen yogurt 
B) Higher prices for both the ice cream and the frozen yogurt 
C) Higher prices for ice cream,but lower prices for frozen yogurt 
D) ​Higher prices for frozen yogurt but lower prices for ice cream 
A) ​Lower prices for both the ice cream and the frozen yogurt 
B) Higher prices for both the ice cream and the frozen yogurt 
C) Higher prices for ice cream,but lower prices for frozen yogurt 
D) ​Higher prices for frozen yogurt but lower prices for ice cream

Question 16

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​

Accepted Answer

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 
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

Question 17

​Many wines are priced high in order to

Accepted Answer

A) ​Indicate low quality 
B) Indicate high quality 
C) Indicate a bargain brand 
D) ​None of the above 
A) ​Indicate low quality 
B) Indicate high quality 
C) Indicate a bargain brand 
D) ​None of the above

Question 18

​A firm that acquires a substitute product can try to reduce inter-product cannibalization by

Accepted Answer

A) ​Doing nothing 
B) Repositioning its product or the substitute so that they do not directly compete with each other 
C) Pricing each product at the same level 
D) ​Lowering the prices on both the products 
A) ​Doing nothing 
B) Repositioning its product or the substitute so that they do not directly compete with each other 
C) Pricing each product at the same level 
D) ​Lowering the prices on both the products

Question 19

By focusing the customers on the price of a product,you make the demand for the product​

Accepted Answer

A) ​More elastic 
B) Less elastic 
C) Perfectly inelastic 
D) ​None of the above 
A) ​More elastic 
B) Less elastic 
C) Perfectly inelastic 
D) ​None of the above

Question 20

​A discount shoe manufacturer's advertisement suggests that they are almost as good as the name brands but better value.The shoe manufacturer believes that the advertisement will

Accepted Answer

A) ​Make the demand for its product more elastic 
B) Make his customers more price sensitive 
C) Cause people to directly compare his product to the name brands 
D) ​All of the above 
A) ​Make the demand for its product more elastic 
B) Make his customers more price sensitive 
C) Cause people to directly compare his product to the name brands 
D) ​All of the above

Exam 11: More Realistic and Complex Pricing

A football stadium has a fixed number of seats.Given this,how should stadium management determine ticket prices?

You own two different energy drink brands with similar elasticities: "Blue Cow" and "600 minute energy." If you reduce the price on "Blue Cow",you can only increase your total sales if

​On average,if demand is unknown and costs of underpricing are _______ than the costs of overpricing,then err on the side of_________.

​Which of the following is FALSE?

​Which of the following is TRUE?

A Swiss watch company advertises its history of superior craftsmanship.The company thinks that this will

​Firm X owns both a grocery store and the parking lot outside the grocery store.In order to increase the traffic at the store,the store should

​You are the owner of an art supply store,selling both paint and paintbrushes.In order to maximize total sales you should

​By focusing the customers on the price of a product,you make

​The pricing rule MR=MC holds for

​Wine Merger In October,2014,Vintners Global Resource's (VGR)agreed to purchase M.A.Silva.VGR is a leading manufacturer of glass bottles and packaging for wines and M.A.Silva is a manufacturer of premium natural corks.What is the expected effect of this merger on price-cost margins?

Firm A owns produces both toothpaste and toothbrushes.In order to increase profits the firm must​

​Firms tend to raise the price of their goods after acquiring a firm that sells a substitute because

Firms should lower the prices on their goods​

​If an ice-cream manufacturer acquires a frozen yogurt producer,you would likely see

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​

​Many wines are priced high in order to

​A firm that acquires a substitute product can try to reduce inter-product cannibalization by

By focusing the customers on the price of a product,you make the demand for the product​

​A discount shoe manufacturer's advertisement suggests that they are almost as good as the name brands but better value.The shoe manufacturer believes that the advertisement will

The One Lessor of Business

Benefits, Costs, and Decisions

Extent How Much Decisions

Investment Decisions: Look Ahead and Reason Back

Simple Pricing

Economies of Scale and Scope

Understanding Markets and Industry Changes

Market Structure and Long Run Equilibrium

Strategy: the Quest to Keep Profit From Eroding

Foreign Exchange, Trade, and Bubbles

Direct Price Discrimination

Strategic Games

Bargaining

Making Decisions With Uncertainty

Auctions

The Problem of Adverse Selection

The Problem of Moral Hazard

Getting Employees to Work in the Firms Best Interest

Getting Divisions to Work in the Firms Best Interest

Managing Vertical Relationships

Filters

On average,if demand is unknown and costs of underpricing are _ than the costs of overpricing,then err on the side of___.

Which of the following is FALSE?

Which of the following is TRUE?

Firm X owns both a grocery store and the parking lot outside the grocery store.In order to increase the traffic at the store,the store should

You are the owner of an art supply store,selling both paint and paintbrushes.In order to maximize total sales you should

By focusing the customers on the price of a product,you make

The pricing rule MR=MC holds for

Wine Merger In October,2014,Vintners Global Resource's (VGR)agreed to purchase M.A.Silva.VGR is a leading manufacturer of glass bottles and packaging for wines and M.A.Silva is a manufacturer of premium natural corks.What is the expected effect of this merger on price-cost margins?

Firm A owns produces both toothpaste and toothbrushes.In order to increase profits the firm must

Firms tend to raise the price of their goods after acquiring a firm that sells a substitute because

Firms should lower the prices on their goods

If an ice-cream manufacturer acquires a frozen yogurt producer,you would likely see

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

Many wines are priced high in order to

A firm that acquires a substitute product can try to reduce inter-product cannibalization by

By focusing the customers on the price of a product,you make the demand for the product

A discount shoe manufacturer's advertisement suggests that they are almost as good as the name brands but better value.The shoe manufacturer believes that the advertisement will