Question 1

Firms that face capacity constraints can increase output only up to the capacity,but no further.Therefore,firms​

Accepted Answer

A) Should price to capacity as long as MR > MC B) Should price to capacity as long as MR = MC C) Should price to capacity as long as MR < MC D) Should not take capacity into consideration in pricing decisions A) Should price to capacity as long as MR > MC B) Should price to capacity as long as MR = MC C) Should price to capacity as long as MR < MC D) Should not take capacity into consideration in pricing decisions

Question 2

​Viceroy Vacations is deciding on how to price its vacation packages.Which of the following strategies would you suggest?

Accepted Answer

A) ​Price the flight,hotel and car separately 
B) Advertise it as an all-inclusive vacation 
C) Give them away as free vacations to everyone 
D) ​Close down your company.No one goes on vacations anymore 
A) ​Price the flight,hotel and car separately 
B) Advertise it as an all-inclusive vacation 
C) Give them away as free vacations to everyone 
D) ​Close down your company.No one goes on vacations anymore

Question 3

​You own two different energy drink brands: "Blue Cow" and "600 minute energy." If you reduce the price on "Blue Cow",sales of "600 minute energy" would

Accepted Answer

A) ​Increase 
B) Decrease 
C) Not change 
D) ​None of the above 
A) ​Increase 
B) Decrease 
C) Not change 
D) ​None of the above

Question 4

Firms should raise 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 c 
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 c

Question 5

After a massive promotional campaign of Justin Bieber's latest music album,the producers decided to raise the prices on the album.This implies that the producers expect the promotion to have made the demand for the album​

Accepted Answer

A) ​More elastic 
B) Unitary elastic 
C) Perfectly elastic 
D) ​More inelastic 
A) ​More elastic 
B) Unitary elastic 
C) Perfectly elastic 
D) ​More inelastic

Question 6

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

Accepted Answer

A) ​Make the demand for the product less elastic 
B) Make the customers less sensitive to the price 
C) Assist them with differentiating their product 
D) ​All of the above 
A) ​Make the demand for the product less elastic 
B) Make the customers less sensitive to the price 
C) Assist them with differentiating their product 
D) ​All of the above

Question 7

​If advertising makes demand of a product more elastic,it makes sense for a firm to

Accepted Answer

A) ​Decrease the price of the product 
B) Increase the price of the product 
C) Leave the price unchanged 
D) ​None of the above 
A) ​Decrease the price of the product 
B) Increase the price of the product 
C) Leave the price unchanged 
D) ​None of the above

Question 8

​Owners of a parking lot are deciding whether or not to add more parking spaces to the lot.The owners should stop adding parking spaces where:

Accepted Answer

A) LRMR=LRMC B) LRMR>LRMC C) LRMRLRMC C) LRMR

Question 9

If advertising makes demand of a product less elastic,it makes sense for a firm to​

Accepted Answer

A) ​Decrease the price of the product 
B) Increase the price of the product 
C) Leave the price unchanged 
D) ​None of the above 
A) ​Decrease the price of the product 
B) Increase the price of the product 
C) Leave the price unchanged 
D) ​None of the above

Question 10

You own two different energy drink brands: "Blue Cow" and "600 minute energy." If you reduce the price on "Blue Cow",​

Accepted Answer

A) ​Sales of "Blue Cow" would increase,without any changes in sales for "600 minute energy." 
B) Sales of both "Blue Cow" and "600 minute energy." would increase 
C) Sales of "Blue Cow" would increase,but the sales of "600 minute energy" would be cannibalized 
D) ​Neither "Blue Cow" nor "600 minute energy" would see an increase in sales. 
A) ​Sales of "Blue Cow" would increase,without any changes in sales for "600 minute energy." 
B) Sales of both "Blue Cow" and "600 minute energy." would increase 
C) Sales of "Blue Cow" would increase,but the sales of "600 minute energy" would be cannibalized 
D) ​Neither "Blue Cow" nor "600 minute energy" would see an increase in sales.

Question 11

​A local restaurant increases the prices on its burgers as soon as it begins a promotional campaign.Which of the following is most likely to be true?

Accepted Answer

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 
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

Question 12

​For products like parking lots and hotels,the relevant costs and benefits to determine how much capacity to build are

Accepted Answer

A) ​LRMR and LRMC 
B) LRMR and SRMC 
C) SRMR and SRMC 
D) ​SRMR and LRMC 
A) ​LRMR and LRMC 
B) LRMR and SRMC 
C) SRMR and SRMC 
D) ​SRMR and LRMC

Question 13

​Large amusement parks charge entrance fees rather than fee per ride because

Accepted Answer

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 
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

Question 14

​In order to increase sales the firm can

Accepted Answer

A) ​Increase the reference price for the product 
B) Decrease prices 
C) Differentiate their product 
D) ​All of the above 
A) ​Increase the reference price for the product 
B) Decrease prices 
C) Differentiate their product 
D) ​All of the above

Question 15

​After firm A acquired firm B,it lowered the prices for the goods produced by both firms.This can increase profits if the goods are

Accepted Answer

A) ​Substitutes 
B) Complements 
C) Not related 
D) ​None of the above 
A) ​Substitutes 
B) Complements 
C) Not related 
D) ​None of the above

Question 16

​After acquiring closely substitutable product brands,a firm can successfully raise prices on both of the brands without losing much of its total sales because

Accepted Answer

A) ​Customers are insensitive to price changes 
B) None of these sales would be captured by its other brand 
C) Some of these sales lost by one brand would be captured by the other 
D) ​All of the above 
A) ​Customers are insensitive to price changes 
B) None of these sales would be captured by its other brand 
C) Some of these sales lost by one brand would be captured by the other 
D) ​All of the above

Question 17

​The general rule to increase profits when two close substitute brands are jointly owned is

Accepted Answer

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 
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

Question 18

​Which of the following are ways of promoting a firm's product

Accepted Answer

A) ​Advertising 
B) Discount coupons 
C) End-of-aisle displays 
D) ​All of the above 
A) ​Advertising 
B) Discount coupons 
C) End-of-aisle displays 
D) ​All of the above

Question 19

​A parking lot in a busy downtown district is experimenting with its pricing strategy to figure out where it should price its spaces.Which of the following strategies should it implement?

Accepted Answer

A) ​Increase parking rates if the lot fills up much earlier than 9am 
B) Decrease parking rates if the lot doesn't fill up until much after 9am 
C) If the lot fills up right around 9am the price is right 
D) ​All of the above 
A) ​Increase parking rates if the lot fills up much earlier than 9am 
B) Decrease parking rates if the lot doesn't fill up until much after 9am 
C) If the lot fills up right around 9am the price is right 
D) ​All of the above

Question 20

The general rule to increase profits when two close complementary brands are jointly owned is​

Accepted Answer

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 
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

Exam 11: More Realistic and Complex Pricing

Firms that face capacity constraints can increase output only up to the capacity,but no further.Therefore,firms​

​Viceroy Vacations is deciding on how to price its vacation packages.Which of the following strategies would you suggest?

​You own two different energy drink brands: "Blue Cow" and "600 minute energy." If you reduce the price on "Blue Cow",sales of "600 minute energy" would

Firms should raise the prices on their goods​

After a massive promotional campaign of Justin Bieber's latest music album,the producers decided to raise the prices on the album.This implies that the producers expect the promotion to have made the demand for the album​

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

​If advertising makes demand of a product more elastic,it makes sense for a firm to

​Owners of a parking lot are deciding whether or not to add more parking spaces to the lot.The owners should stop adding parking spaces where:

If advertising makes demand of a product less elastic,it makes sense for a firm to​

You own two different energy drink brands: "Blue Cow" and "600 minute energy." If you reduce the price on "Blue Cow",​

​A local restaurant increases the prices on its burgers as soon as it begins a promotional campaign.Which of the following is most likely to be true?

​For products like parking lots and hotels,the relevant costs and benefits to determine how much capacity to build are

​Large amusement parks charge entrance fees rather than fee per ride because

​In order to increase sales the firm can

​After firm A acquired firm B,it lowered the prices for the goods produced by both firms.This can increase profits if the goods are

​After acquiring closely substitutable product brands,a firm can successfully raise prices on both of the brands without losing much of its total sales because

​The general rule to increase profits when two close substitute brands are jointly owned is

​Which of the following are ways of promoting a firm's product

​A parking lot in a busy downtown district is experimenting with its pricing strategy to figure out where it should price its spaces.Which of the following strategies should it implement?

The general rule to increase profits when two close complementary brands are jointly owned is​

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

Firms that face capacity constraints can increase output only up to the capacity,but no further.Therefore,firms

Viceroy Vacations is deciding on how to price its vacation packages.Which of the following strategies would you suggest?

You own two different energy drink brands: "Blue Cow" and "600 minute energy." If you reduce the price on "Blue Cow",sales of "600 minute energy" would

Firms should raise the prices on their goods

After a massive promotional campaign of Justin Bieber's latest music album,the producers decided to raise the prices on the album.This implies that the producers expect the promotion to have made the demand for the album

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

If advertising makes demand of a product more elastic,it makes sense for a firm to

Owners of a parking lot are deciding whether or not to add more parking spaces to the lot.The owners should stop adding parking spaces where:

If advertising makes demand of a product less elastic,it makes sense for a firm to

You own two different energy drink brands: "Blue Cow" and "600 minute energy." If you reduce the price on "Blue Cow",

A local restaurant increases the prices on its burgers as soon as it begins a promotional campaign.Which of the following is most likely to be true?

For products like parking lots and hotels,the relevant costs and benefits to determine how much capacity to build are

Large amusement parks charge entrance fees rather than fee per ride because

In order to increase sales the firm can

After firm A acquired firm B,it lowered the prices for the goods produced by both firms.This can increase profits if the goods are

After acquiring closely substitutable product brands,a firm can successfully raise prices on both of the brands without losing much of its total sales because

The general rule to increase profits when two close substitute brands are jointly owned is

Which of the following are ways of promoting a firm's product

A parking lot in a busy downtown district is experimenting with its pricing strategy to figure out where it should price its spaces.Which of the following strategies should it implement?

The general rule to increase profits when two close complementary brands are jointly owned is