Price Discrimination1) To be able to price discriminate, a firm mustA) lower prices for all customers.B) raise prices for all customers.C) be able to identify and separate different types of buyers.D) sell a product that can be resold.E) Both answers B and C are correct

Price discrimination it is a practice of charging different price to different types of consumers.

Answered: Price Discrimination 1) To be able to…

Managerial Economics: A Problem Solving Approach

5th Edition

ISBN:9781337106665

Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor

Publisher:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor

Chapter14: Indirect Price Discrimination

Section: Chapter Questions

Problem 2MC

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To engage in first-degree price discrimination, a firm must Multiple Choice be able to set P > MC, know each consumer's maximum willingness to pay, and prevent low-value consumers from reselling to high-value consumers. prevent low-value consumers from reselling to high-value consumers. be able to set P > MC. know each consumer's maximum willingness to pay.
When does price discrimination take place? Group of answer choices A monopoly enters a market with high-income customers. A business conceals its pricing policies. A business charges different prices to different customers based on their willingness to pay.
Which of the following is a necessary condition for price discrimination? Group of answer choices a. Buyers are aware of prices charged to other buyers. b. The seller is a perfectly competitive firm. c. Buyers have identical elasticities of demand. d. Resale of the product or service is possible. e. The seller can separate consumers according to their elasticities of demand.
If a firm engages in perfect price discrimination, it charges a. different prices to customers based on how many units of output they buy b. each customer the highest price the customer is willing to pay c. different prices to customers based on how old they are d. each customer the average cost of the product e. each customer the lowest price the customer is willing to pay
Which of the following is not a requirement for a successful price discrimination strategy? A. A firm must have market power B. The firm must be able to prevent consumers who buy a product at a low price from reselling it to other consumers at a high price. C. Some consumers must have greater willingness to pay for the product than other consumers, and the firm must be able to know what prices consumers are willing to pay D. The good must be a very expensive good
Which of the following is necessary for a firm to practice price discrimination? Group of answer choices a. The firm is a member of a cartel. b. The demand curve for the product is perfectly inelastic. c. The firm can prevent resale of its goods. d. The government strictly enforces antitrust laws. e. The demand curve for the product is perfectly elastic.
In third-degree price discrimination, consumer groups with the largest price elasticity of demand will pay the lowest price compared to the consumer groups with smaller price elasticities. True or False.
Which of the following if true would make it harder for a firm to practice price discrimination? Group of answer choices There is a market where buyers can resell what they buy. The firm knows about differences in demand across recognizable groups. The firm has market power.
Decide whether the statement is True, False, or Uncertain, and give a brief explanation. A car rental company has been issuing coupons on the internet. Since the coupons are accessible to the general public, they cannot be a form of price discrimination.
For direct price discrimination to work a. The firm must be able to identify the members of the low value group b. The firm must charge a single price to all its customers c. The firm need not worry about any arbitrage since all its customers are charged the same price d. The firm should charge a higher price to those customers with the most elastic demand.
The following are the necessary conditions which must be fulfilled for the implementation of price discrimination except for ______ a. there should be no arbitrage b. the market must be divided into sub-markets with different elasticities of demand c. the good or service in question should not be resaleable d. the market must be divided into sub-markets with different elasticities of supply
Select the correct statements. Note. Multiple correct, multiple selections A. With first-degree price discrimination, the marginal revenue curve is below the demand curve, with the absolute value of the slope equal to twice the slope of demand B. With first-degree price discrimination, the marginal revenue curve is the same as the demand curve. C. With third degree price discrimination, the firm identifies different consumer groups, or segments in a market and then charges a price for each segment by setting the price equal to marginal cost D. With a block tariff (with two blocks), the consumer pays one price for units consumed in the first block of output (up to a given quantity) and a different (usually lower price for any additional units E. Mixed bunding is sometimes the most profitabile strategy for a firm because consumers prefer to spend on binges and make multiple purchases at the same time

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Price Discrimination 1) To be able to price discriminate, a firm must A) lower prices for all customers. B) raise prices for all customers. C) be able to identify and separate different types of buyers. D) sell a product that can be resold. E) Both answers B and C are correct