A) is the act of buying an item at a low price and reselling the item at a higher price. B) is the act of selling an item on consignment and collecting a huge portion of the proceeds to compensate for the seller's time. C) is the act of buying an item at a low price,bundling it with another and selling the new package at a much higher price. D) is any act of buying and selling that results in the seller earning an above normal profit. A) is the act of buying an item at a low price and reselling the item at a higher price. B) is the act of selling an item on consignment and collecting a huge portion of the proceeds to compensate for the seller's time. C) is the act of buying an item at a low price,bundling it with another and selling the new package at a much higher price. D) is any act of buying and selling that results in the seller earning an above normal profit.

Exam 16: Pricing Strategy

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Suppose a restaurant is trying to determine how much to charge for a bowl of chili,and decides to run an experiment to see how much its customers are willing to pay by allowing them to set their own price for this menu item. a.Is charging a customer the price he or she is willing to pay for the bowl of chili an example of price discrimination? Briefly explain. b.What is it called when a firm knows every consumer's willingness to pay,and can charge every consumer a different price? What happens to consumer surplus in this situation?

(Essay)

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Question 41

There is no evidence that odd pricing succeeds in convincing consumers that prices are lower than they really are.

(True/False)

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Question 42

Arbitrage

(Multiple Choice)

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Question 43

Figure 16-5 -Refer to Figure 16-5.Suppose the firm represented in the diagram decides to use a two-part pricing strategy such that it charges a fixed fee and a per-unit price equal to the competitive price.(This is also called an optimal two-part tariff. )What is the per-unit price it should charge,if any?

(Multiple Choice)

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Question 44

Price discrimination is a rational strategy for a profit-maximizing firm when

(Multiple Choice)

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Question 45

The term "early adopters" refers to

(Multiple Choice)

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Question 46

The law of one price states

(Multiple Choice)

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Question 47

Potential Customer Willingness to Pay (dollars per hour) Arun \ 8 Bernice 9 Cara 10 Dawn 12 Julie plans to start a pet-sitting service.She surveyed her neighborhood to determine the demand for this service.Assume that each person surveyed demands only one hour of pet sitting services per period.Table 16-3 above shows a portion of her survey results. -Refer to Table 16-3.Suppose Julie's marginal cost of providing this service is constant at $7 and she decides to charge each customer according to his or her willingness to pay.What is the value of consumer surplus by her customers?

(Multiple Choice)

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Question 48

The process of rapidly adjusting prices based on information gathered on consumers' preferences and their responsiveness to changes in price is called

(Multiple Choice)

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Question 49

Bubba's Hula Shack bar and bistro has begun giving customers who can show proof that they arrived at the establishment by public transportation a 10 percent discount on their total bill.This is an example of

(Multiple Choice)

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Question 50

What is the difference between price discrimination and other forms of discrimination?

(Essay)

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Question 51

Cost-plus pricing may be a reasonable way to determine price when

(Multiple Choice)

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Question 52

To successfully price discriminate,a firm must ensure that there are no opportunities for arbitrage.

(True/False)

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Question 53

A two-part tariff refers to a pricing schedule under which a buyer must pay a fixed fee for the right to purchase the product,in addition to a per-unit price.

(True/False)

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Question 54

Which of the following is not a requirement for a successful price discrimination strategy?

(Multiple Choice)

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Question 55

Dell Computers allows potential consumers to customize personal computers to their desires.Dell's strategy is successful because offering bundles that more exactly meet a consumer's preference allows Dell to extract more consumer surplus.

(True/False)

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Question 56

Figure 16-5 -Refer to Figure 16-5.Suppose the firm represented in the diagram decides to use a two-part pricing strategy such that it charges a fixed fee and a per-unit price equal to the competitive price.(This is also called an optimal two-part tariff. )What is the total revenue it can expect to collect from the fixed fee portion of the price?

(Multiple Choice)

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Question 57

Many book publishers use cost-plus pricing to establish prices for some of their books.Would you expect a publishing company to use a strict cost-plus pricing system for all its books? How might you determine if a publishing company actually does use cost-plus pricing for all its books?

(Essay)

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Question 58

Which of the following undermines a firm's ability to engage in price discrimination?

(Multiple Choice)

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Question 59

Which of the following will prevent firms from engaging in price discrimination?

(Multiple Choice)

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Question 60

Showing 41 - 60 of 261

Exam 16: Pricing Strategy

There is no evidence that odd pricing succeeds in convincing consumers that prices are lower than they really are.

Arbitrage

Price discrimination is a rational strategy for a profit-maximizing firm when

The term "early adopters" refers to

The law of one price states

The process of rapidly adjusting prices based on information gathered on consumers' preferences and their responsiveness to changes in price is called

Bubba's Hula Shack bar and bistro has begun giving customers who can show proof that they arrived at the establishment by public transportation a 10 percent discount on their total bill.This is an example of

What is the difference between price discrimination and other forms of discrimination?

Cost-plus pricing may be a reasonable way to determine price when

To successfully price discriminate,a firm must ensure that there are no opportunities for arbitrage.

A two-part tariff refers to a pricing schedule under which a buyer must pay a fixed fee for the right to purchase the product,in addition to a per-unit price.

Which of the following is not a requirement for a successful price discrimination strategy?

Dell Computers allows potential consumers to customize personal computers to their desires.Dell's strategy is successful because offering bundles that more exactly meet a consumer's preference allows Dell to extract more consumer surplus.

Many book publishers use cost-plus pricing to establish prices for some of their books.Would you expect a publishing company to use a strict cost-plus pricing system for all its books? How might you determine if a publishing company actually does use cost-plus pricing for all its books?

Which of the following undermines a firm's ability to engage in price discrimination?

Which of the following will prevent firms from engaging in price discrimination?

Economics: Foundations and Models

Trade-Offs, comparative Advantage, and the Market System

Where Prices Come From: the Interaction of Demand and Supply

Economic Efficiency, government Price Setting, and Taxes

Externalities, environmental Policy, and Public Goods

Elasticity: the Responsiveness of Demand and Supply

The Economics of Health Care

Firms,the Stock Market,and Corporate Governance

Comparative Advantage and the Gains From International Trade

Consumer Choice and Behavioral Economics

Technology,production,and Costs

Firms in Perfectly Competitive Markets

Monopolistic Competition: the Competitive Model in a More Realistic Setting

Oligopoly: Firms in Less Competitive Markets

Monopoly and Antitrust Policy

The Markets for Labor and Other Factors of Production

Public Choice, taxes, and the Distribution of Income

Gdp: Measuring Total Production and Income

Unemployment and Inflation

Economic Growth, the Financial System, and Business Cycles

Long-Run Economic Growth: Sources and Policies

Aggregate Expenditure and Output in the Short Run

Aggregate Demand and Aggregate Supply Analysis

Money,banks,and the Federal Reserve System

Monetary Policy

Fiscal Policy

Inflation, unemployment, and Federal Reserve Policy

Macroeconomics in an Open Economy

The International Financial System

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