Exam 12: Pricing and Advertising

For a theme park a two-tier tariff can include a positive admission price and a zero per-ride fee.

Perfect price discrimination is

Charging a higher price for a motel room to customers with dogs or cats than to customers with no pets is most likely an example of

A mail-order clothing company offers a discount if customers purchase two shirts instead of only one.This is necessarily an example of quantity discrimination.

Explain using welfare measures whether consumers prefer a single price monopoly or a perfectly price discriminating monopoly.

If a monopoly charges higher prices to consumers who buy smaller quantities than to consumers who buy larger quantities,then

Suppose group price discrimination is possible;however,a firm sets the same price in each market.As a result,

At the current price of a good,Al's consumer surplus equals eight,and Ben's consumer surplus equals 15.By charging a two-part tariff,a monopolist could increase his profit by

Each identical consumer has the following demand for golf,q = 100 - p,where q is the number of rounds of golf played per year and p is the price per round.The only golf course in an isolated town incurs a marginal cost of $10 per round of golf.It wishes to charge a membership fee and a fee per round of golf.What price will it set for each fee?

If consumers are identical,then

Two-part tariffs offer a mechanism whereby the firm can

-The above figure shows the market for a particular good.If the market is controlled by a perfect-price-discriminating monopoly,producer surplus equals

When firms price discriminate they turn ________ into ________.

A coffee shop sells a small cup of coffee at $3,while a large cup,which is twice as big,at $5.This is an example of

Explain why a monopoly that knows the demand curve of identical consumers can set a two-part tariff with the lump sum tariff equal to the total amount of potential consumer surplus.

Which of the following is NOT an example for third-degree price discrimination?

Many theme parks charge an entrance fee and a per-ride fee equal to zero.This is an example of

-The above figure shows the market for a particular good.If the market is controlled by a perfect-price-discriminating monopoly,compared to a monopoly who charges a single price,the change in total surplus is

-Bob is the only carpet installer in a small isolated town.The above figure shows the demand curves of two distinct groups of customers-residential and business.If the marginal cost of installing carpet is a constant $1 per sq yard,what price does Bob charge each segment?

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 higher price will be