ECON705 Low Demanders
Select one:
a. less than; total demand includes people who would be willing to pay more than, as well as less than, the uniform market price.
b. greater than; the cost of trying to determine every single consumer's individual demand (willingness to pay) is prohibitively expensive.
c. equal to; the and curves are equivalent under either pricing scheme, so there is no profit advantage to either scheme.
d. less than; uniform pricing is more costly so the and
curves are higher than they are under price discrimination.A firm selling in two markets is practicing price discrimination
Select one:
a. anytime it charges different consumers different prices.
b. when it is charging different consumers different prices and the price difference is not based upon cost differences.
c. when it refuses to sell the good to some group of consumers.
d. when it charges the same price to different consumers as long as
they differ in their demand for the good.To successfully practice price discrimination
Select one:
a. the firm must be a pure monopoly.
b. consumers in two separate markets must have identical demand.
c. the firm must possess market power.
d. it must be easy for consumers in one market to sell to consumers in the other market.If it could practice first-degree price discrimination, a firm with market power could earn
Select one:
a. an area half the size of its monopoly power under uniform pricing.
b. its typical monopoly profit as well as the area which, under uniform pricing, would represent consumer surplus and the deadweight loss associated with market power.
c. its typical monopoly profit as well as the area which, under uniform pricing, would represent the deadweight loss associated with market power.
d. its typical monopoly profit as well as the area which, under uniform pricing, would represent consumer surplus.
A news magazine offers students a discount on the regular subscription rate.
a. stop offering students a discount on the regular subscription rate.
b. offer students a higher discount (lower the price to students).
c. offer all customers the same discount received by the students.
d. offer students a lower discount (raise the price to students).
A firm is producing two goods ( and ) that are related in consumption.The demand function for is: Which of the following pairs of goods might the firm be producing?
Select one:
a. bran cereal and sugar-frosted corn flakes
b. shampoo and conditioner
c. cola and caffeine-free coke
d. newspapers and tennis balls
In order to maximize profit, a firm like the one above, which is producing two goods that are related in consumption, should choose the levels of output at which
Select one:
a. the marginal revenue of each good equals total marginal cost.
b. marginal revenue equals marginal cost for each good simultaneously.
c. total marginal revenue equals total marginal cost.
d. total marginal revenue equals the marginal cost of each good.
Answer:
Answer 1
Market 2 has less demand than market 1. 2 is low demanders, 1 is high demanders.
Answer 2
c.
40 units
Answ
er 3
b.
24 units in market 1, 16 units in market 2
Answer 4
c.
$176 in market 1; $152 in market 2
Answer 5
b.
Price discrimination between demanders. High demanders are willing to pay a high price for a plan that includes additional channels and recording ability. Low demanders aren't, and are only willing to pay a low price for a relatively smaller number of options.
Answer 6
a.
Q = 20; P = $40.75; profit = $800
Answer 7
b.
Q = 40; P = 0.75; CS increases by $1200 (from $400 to $1600)
Answer 8
a.
$400
Answer 9
a.
They encourage businesses to refrain from price gouging since it will negatively a?ect their reputations and future pro?tability
Answer 10
b.
While the reputation e?ect may be true, the high price will encourage outside suppliers to come to the a?ected area and will mitigate the shortage.
Answer 1
a.
less than; total demand includes people who would be willing to pay more than, as well as less than, the uniform market price
Answer 2
b.
when it is charging di?erent consumers di?erent prices and the price di?erence is not based upon cost di?erences.
Answer 3
c.
the ?rm must possess market power
Answer 4
b.
its typical monopoly pro?t as well as the area which, under uniform pricing, would represent consumer surplus and the deadweight loss associated with market power
Answer 5
d.
o?er students a lower discount (raise the price to students).
Answer 6
b.
Shampoo and conditioner
Answer 7
b.
marginal revenue equals marginal cost for each good simultaneously
Answer 8
c.
society places a higher value on the resources required to produce the last unit than the value society places on consuming the last unit
Answer 9
c.
both I. and III
Answer 10
a.
lawmakers and regulators usually have incentives to seek other goals besides economic e?ciency per se.
Answer 11
a.
there is an over allocation of resources toward producing the good.
Answer 12
b.
allocative e?ciency is achieved
Answer 13
d.
overproduce the good because marginal private cost is less than marginal social cost in competitive equilibrium.
Answer 14
b.
the free rider problem cBuy ECON705 Low Demanders Answers Online
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