Exam 12: Pricing Strategy

At The Crepe Café in Bahrain, the regular dinner main course costs on average 3.2 Bahrain dinars (BHD) (US$1 = 0.377), with an additional BHD1.2 for a salad and a soft drink. But if you go to The Crepe Café at lunchtime, between 11 and 3, you will get the same main course, a salad, and a soft drink for only BHD2.9.

Some consumer electronic products such as plasma TVs, DVD players and digital cameras, are introduced at very high prices but over time, their prices start falling (beyond what could be attributed to falling costs as companies take advantage of economies of scale and cheaper technologies) . Which of the following is the best explanation for this observation?

A pharmaceutical company manufactures an arthritis drug that can be prescribed for humans and for dogs. A month's supply of the drug sells for $150 when prescribed for humans and $48 when prescribed for dogs. One can conclude that demand for human consumption is more price elastic than the demand for pet consumption.

Jannah is a marketing consultant. Irene and Dalia are potential customers interested in commissioning Jannah to undertake a market survey and compile the findings in a report. Irene is willing to pay $500 for the service while Dalia is willing to pay $800. Suppose that the opportunity cost of Jannah's time is $1,200. Assume that Irene and Dalia do not know each other. If Jannah charges the same price per copy to both Irene and Dalia,

Some Arab countries established governmental agencies that aim at protecting the markets from illegal price discrimination practices because

When colleges use yield management techniques, they

When the Egyptian and Jordanian governments engage in price discrimination against energy intensive industries these industries have no choice but to accept the status quo and pay the high price. This is because

Suppose Masqat Cement Company charges the same price per ton of cement to consumers regardless of their location, hence absorbing all transportation costs. This implies that the company is engaging in price discrimination.

Suppose a firm knows that potential customers of its product belong to different groups but cannot identify their membership in a group until after a transaction has taken place. In this situation, it is not possible for the firm to engage in price discrimination.

Fullah Playhouse, a theatre company in Kuwait city, caters to two groups of customers: students and the non-student population. Figure 12-2 shows the demand curves for the two groups of customers. -Refer to Figure 12 -2. Suppose Fullah Playhouse price discriminates. Which of the following statements is true?

Jannah is a marketing consultant. Irene and Dalia are potential customers interested in commissioning Jannah to undertake a market survey and compile the findings in a report. Irene is willing to pay $500 for the service while Dalia is willing to pay $800. Suppose that the opportunity cost of Jannah's time is $1,200. Assume that Irene and Dalia do not know each other. If the price is $800 per copy,

A firm using a two -part tariff faces a tradeoff because

The Opera Theatre sells play tickets for the same play at different prices: a lower price to those who opt for the seats at the back of the theatre and a higher price for those who purchase seats in the front, around the stage. Which of the following statements is true?

Table 12-1 shows the price for the novel, Harry Potter and The Deathly Hallows at four online bookstores. -Refer to Table 12 -1. Which of the following can one conclude from the data above?