Question 1

Criticisms of the Robinson-Patman act ​

Accepted Answer

A) ​It can reduces consumer surplus 
B) It can reduces producer surplus 
C) It can creates inefficiency through unconsummated transactions 
D) ​All of the above 
A) ​It can reduces consumer surplus 
B) It can reduces producer surplus 
C) It can creates inefficiency through unconsummated transactions 
D) ​All of the above D

Question 2

​Which of the following is an example of a "damaged goods" strategy

Accepted Answer

A) ​A supermarket offers free parking space but charges higher for groceries 
B) A television reseller spends time making sure that the picture quality of the bargain priced sets is fuzzy 
C) A gift store hikes up the prices on gift wrapping services during its seasonal sale 
D) ​All of the above 
A) ​A supermarket offers free parking space but charges higher for groceries 
B) A television reseller spends time making sure that the picture quality of the bargain priced sets is fuzzy 
C) A gift store hikes up the prices on gift wrapping services during its seasonal sale 
D) ​All of the above B

Question 3

​Relative to simple pricing,price discrimination leads to

Accepted Answer

A) ​Consumer surplus being converted to producer surplus 
B) Increased profits 
C) A simplified pricing schedule 
D) ​Both a and b 
A) ​Consumer surplus being converted to producer surplus 
B) Increased profits 
C) A simplified pricing schedule 
D) ​Both a and b D

Question 4

​Airlines charge a ____________price to business travelers compared to leisure travelers because business travelers have a ____________ demand than leisure travelers.

Accepted Answer

A) ​Higher;more elastic 
B) Higher;less elastic 
C) Lower;more elastic 
D) ​Lower;less elastic 
A) ​Higher;more elastic 
B) Higher;less elastic 
C) Lower;more elastic 
D) ​Lower;less elastic

Question 5

​The "metering" scheme refers to

Accepted Answer

A) ​Discriminating consumers through the amount of product bought 
B) Giving away core technology and making up for it through higher margins on secondary sales 
C) An indirect method of price discrimination 
D) ​All of the above 
A) ​Discriminating consumers through the amount of product bought 
B) Giving away core technology and making up for it through higher margins on secondary sales 
C) An indirect method of price discrimination 
D) ​All of the above

Question 6

​For direct price discrimination to work,the firm

Accepted Answer

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 
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

Question 7

​It is illegal for a business to price discriminate when selling goods to other businesses unless
Both A & B are true

Accepted Answer

A) ​Price discounts are cost-justified 
B) Discounts are offered to meet competitors' price 
C) Either A or B is true 
A) ​Price discounts are cost-justified 
B) Discounts are offered to meet competitors' price 
C) Either A or B is true

Question 8

​For direct price discrimination to work,

Accepted Answer

A) ​The firm need not be able to identify 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) ​None of the above 
A) ​The firm need not be able to identify 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) ​None of the above

Question 9

​An important lesson about pricing is

Accepted Answer

A) ​Do not bargain with the customer 
B) When bargaining with the customer,do not bargain over the bundled price,bargain over unit price 
C) When bargaining with the customer,do not bargain over the unit price,bargain over the bundled price 
D) ​Bargain with the customer over everything 
A) ​Do not bargain with the customer 
B) When bargaining with the customer,do not bargain over the bundled price,bargain over unit price 
C) When bargaining with the customer,do not bargain over the unit price,bargain over the bundled price 
D) ​Bargain with the customer over everything

Question 10

​Movie theatres offer seniors discounts because

Accepted Answer

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 
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

Question 11

​For a firm to maximize total profits through price discrimination,it should

Accepted Answer

A) ​charge a low price to high-value consumers and a high price to low-value consumers 
B) charge a high price to high-value consumers and a high price to low-value consumers 
C) charge a low price to high-value consumers and a low price to low-value consumers 
D) ​charge a high price to high-value consumers and a low price to low-value consumers 
A) ​charge a low price to high-value consumers and a high price to low-value consumers 
B) charge a high price to high-value consumers and a high price to low-value consumers 
C) charge a low price to high-value consumers and a low price to low-value consumers 
D) ​charge a high price to high-value consumers and a low price to low-value consumers

Question 12

​Which of the following are ways to sell a customer additional units without dropping the price on previous purchases

Accepted Answer

A) ​Offer quantity discounts 
B) Offer two-part pricing ex: membership fees 
C) Bundle the goods together 
D) ​All of the above 
A) ​Offer quantity discounts 
B) Offer two-part pricing ex: membership fees 
C) Bundle the goods together 
D) ​All of the above

Question 13

​Public transit offers discounted monthly passes to students,which can only be bought and used with valid student IDs.The transit system is using

Accepted Answer

A) ​A direct discrimination scheme 
B) An indirect discrimination scheme 
C) The Robinson-Patman act 
D) ​None of the above 
A) ​A direct discrimination scheme 
B) An indirect discrimination scheme 
C) The Robinson-Patman act 
D) ​None of the above

Question 14

​Use the following table for  
-Given an equal amount of users,if the firm can only set one price,how should the firm price the no-name brand wok?​

Accepted Answer

A) ​Price low and sell to both the users 
B) Price high and sell only to the professional chefs 
C) Price low and sell only to the home users 
D) ​All of the above 
A) ​Price low and sell to both the users 
B) Price high and sell only to the professional chefs 
C) Price low and sell only to the home users 
D) ​All of the above

Question 15

​Metering is

Accepted Answer

A) ​A form of indirect price discrimination 
B) A form of direct price discrimination 
C) An evaluation of a product 
D) ​An example of bundling 
A) ​A form of indirect price discrimination 
B) A form of direct price discrimination 
C) An evaluation of a product 
D) ​An example of bundling

Question 16

Amusement Park / Cola Tie-in
The Six Flags Over Texas amusement part in the middle of the Dallas-Fort Worth Metroplex has a tie-in marketing campaign with Coca-Cola during the summer.In local grocery stores,some Coke cans offer $5 off admission to the park.Why does Six Flags limit these cans so that none are sold further than 20 miles from the park?​

Accepted Answer

This is a price discrimination scheme tr

Question 17

​Which of the following is an example of a "metering" strategy

Accepted Answer

A) ​A supermarket offers free parking space but charges higher for grocery 
B) A television reseller spends time making sure that the picture quality of the bargain priced sets is fuzzy 
C) Razors are sold at unit cost while razor blades have large profit margins 
D) ​All of the above 
A) ​A supermarket offers free parking space but charges higher for grocery 
B) A television reseller spends time making sure that the picture quality of the bargain priced sets is fuzzy 
C) Razors are sold at unit cost while razor blades have large profit margins 
D) ​All of the above

Question 18

Which of the following is an example of the "metering" strategy​

Accepted Answer

A) ​A doll company selling dolls at cost but charging high margins on doll 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) ​Only A&B 
A) ​A doll company selling dolls at cost but charging high margins on doll 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) ​Only A&B

Question 19

​Use the following table for question
  
-​Given that the firm only chooses to sell the no-name brand,how should it price its product?

Accepted Answer

A) ​Price low,sell to both users 
B) Price high,sell only to the professional chefs 
C) Price low,sell only to the professional chefs 
D) ​Price high,sell only to the home users 
A) ​Price low,sell to both users 
B) Price high,sell only to the professional chefs 
C) Price low,sell only to the professional chefs 
D) ​Price high,sell only to the home users

Question 20

​Which of the following is an example of the "damaged goods" strategy

Accepted Answer

A) ​A doll company selling dolls at cost but charging high margins on doll 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 
A) ​A doll company selling dolls at cost but charging high margins on doll 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

Criticisms of the Robinson-Patman act

Which of the following is an example of a "damaged goods" strategy

Relative to simple pricing,price discrimination leads to

Airlines charge a price to business travelers compared to leisure travelers because business travelers have a demand than leisure travelers.

The "metering" scheme refers to

For direct price discrimination to work,the firm

It is illegal for a business to price discriminate when selling goods to other businesses unless Both A & B are true

For direct price discrimination to work,

An important lesson about pricing is

Movie theatres offer seniors discounts because

For a firm to maximize total profits through price discrimination,it should

Which of the following are ways to sell a customer additional units without dropping the price on previous purchases

Public transit offers discounted monthly passes to students,which can only be bought and used with valid student IDs.The transit system is using

Use the following table for question -Given an equal amount of users,if the firm can only set one price,how should the firm price the no-name brand wok?

Metering is

Which of the following is an example of a "metering" strategy

Which of the following is an example of the "metering" strategy

Use the following table for question -Given that the firm only chooses to sell the no-name brand,how should it price its product?

Which of the following is an example of the "damaged goods" strategy

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

More Realistic and Complex Pricing

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

Exam 12: Direct Price Discrimination