Exam 10: Pricing With Market Power

Textbook publishers often sell the same or essentially identical books in different countries for different prices.Is this an effective form of group price discrimination?

A monopoly will not be able to perfectly price discriminate if

Suppose all individuals are identical,and their monthly demand for Internet access from a certain leading provider can be represented as p = 5 - (1/2)q where p is price in $ per hour and q is hours per month.The firm faces a constant marginal cost of $1.The profit maximizing two-part tariff results in the firm selling

Consumers are better off with pricing in the following order: 1)________; 2)________; 3)________.

Tie-in sales are most advantageous to the seller when

What is one reason suppliers might offer a discount for quantity purchases?

Firms can only use one form of price discrimination.

Which of the following is an example of mixed bundling?

The sales of shoes that include shoelaces is a tie-in sale that most likely

A group price discriminator sells its product in Florida for three times the price it sets in New York.Assuming the firm faces the same constant marginal cost in each market and the price elasticity of demand in New York is -2.0,the demand in Florida

With two-part pricing,a firm

At many municipal golf courses,local residents pay a lower fee to play than other golfers do.One necessary condition for the golf course to be able to successfully price discriminate according to residency is that

Nonlinear price discrimination

What is the primary difference between bundling and tie-ins?

Individual price discrimination is used when

Airlines offer lower prices to vacationers than to business travelers because

If a firm sells to two distinct identifiable markets and resale is impossible,why is price discrimination more profitable than setting a single price?

Two-part pricing allows the monopoly firm to capture all of the potential consumer surplus generated by the sale of its product.

When firms price discriminate they turn ________ into ________.

Suppose a profit-maximizing monopoly is able to employ group price discrimination.The marginal cost of providing the good is constant and the same in both markets.The marginal revenue the firm earns on the last unit sold in the market with the lower price will be