Question 1

A typical university football program requires alumni to join one of several booster clubs (each club gets seats in different parts of the stadium)before the person can buy season tickets.What has this got to do with consumer surplus?

Accepted Answer

The answer of A typical university football program requires alumni...

Question 2

Wet-n-Wild Indoor Water Park offers family fun year-round in the Northstar state to locals and out-of-state visitors.The demand for day passes to the water park for each market segment is independent of the other market segment.The marginal cost of providing service to each visitor is $5 per day.Suppose the daily demand curves for the two market segments are  .
(a)If Wet-n-Wild Indoor Water Park charges one price to all visitors,what is the profit maximizing price? How many day passes will be sold per day?
(b)If Wet-n-Wild Indoor Water Park charges one price to locals,what is the profit maximizing price for locals? How many day passes will be sold per day to locals?
(c)If Wet-n-Wild Indoor Water Park charges one price to out-of-towners,what is the profit maximizing price for out-of-town guests? How many day passes will be sold per day to out-of-town guests?
(d)Compare the prices from uniform pricing to the prices from price discrimination.

Accepted Answer

The answer of Wet-n-Wild Indoor Water Park offers family fun...

Question 3

Under block pricing,a company might

Accepted Answer

A) charge a customer different prices per unit,depending on the customer's loyalty. 
B) charge a customer different prices per unit,depending on the number of units purchased. 
C) provide a customer different units,depending on the price the consumer bids. 
D) charge a customer different prices per unit,depending on the price the consumer bids.

Question 4

Price discrimination is usually defined as selling a product to different customers at

Accepted Answer

A) the same price even though costs of service are different. 
B) different prices as costs of service are different. 
C) the same price as costs of service are the same. 
D) different prices even though costs of service are the same.

Question 5

If a firm charges a price equal to the marginal cost-the competitive solution-then the gains from trade are

Accepted Answer

A) all in the form of producer surplus. 
B) split between producer and consumer surplus. 
C) all in the form of consumer surplus. 
D) split between shareholders and producers.

Question 6

Electric generator companies did not raise their prices when there was a huge demand for their products,due to a power shortage.The companies decided against a price rise because they were

Accepted Answer

A) concerned about being sued by consumer activists. 
B) concerned about political backlash. 
C) concerned about peoples' welfare. 
D) concerned about reputation and future demand.

Exam 7: Pricing With Market Power

A typical university football program requires alumni to join one of several booster clubs (each club gets seats in different parts of the stadium)before the person can buy season tickets.What has this got to do with consumer surplus?

Under block pricing,a company might

Price discrimination is usually defined as selling a product to different customers at

If a firm charges a price equal to the marginal cost-the competitive solution-then the gains from trade are

Electric generator companies did not raise their prices when there was a huge demand for their products,due to a power shortage.The companies decided against a price rise because they were