MANAGERIAL ECONOMICS (LOOSELEAF)
5th Edition
ISBN: 9781337571371
Author: FROEB
Publisher: CENGAGE L
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Question
Chapter 1, Problem 10MC
To determine
The reason for advertising low price for high-profile goods and selling at loss.
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Students have asked these similar questions
Sellers are willing to sell their product at a very low price even it high priced items cost more? What is the rational behind this concept?
a. To dominate the market with low-cost items
b. Low priced items are a magnet for customers to come in and this will create opportunity to sell low priced item with high markup price.
c. To lure frequent buyers.
d. This reduces the incentives of trade.
Why does a seller with a good reputation face a different opportunity cost foroffering poor-quality goods than a seller with no reputation to lose?
What is the major challenge presented by Amazon and Uber to Grubhub's business?
Does the restaurant industry seem like a stable options for aspiring entrepreneurs to pursue? Why
Chapter 1 Solutions
MANAGERIAL ECONOMICS (LOOSELEAF)
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- A restaurant, has two main courses, steak and fish. Assume for simplicity that both specialties can be prepared at zero marginal cost. The restaurant has two loyal diners: Mr. A, who is willing to pay $120 for the steak and $40for the sea bass, and Ms. B, who is willing to pay $50 for the steak and $150 for the fish. a) The restaurant would like to charge Mr. A more for the steak and Ms. B more forthe fish. Would it be difficult to do this? Why? b) Suppose the restaurant decides to offer a special menu that includes both the ribeye steakand the fish. What price should it set for the menu? How much profit will the restaurant make under this arrangement?arrow_forwardGive only typing answer with explanation and conclusion Strategic Marketing: Why has Social Responsibility grown over the last few years? What makes Social Responsibility an important issue for businesses?arrow_forwardIs price an indicator of quality? Explain and give an example we didn’t discuss in class. Use a supporting information to help illustrate your answer (a current example or advertisement).arrow_forward
- Discounts and incentives are demand options. True Falsearrow_forwardWhich of the market structures is the easiest to penetrate and why? Please explain.arrow_forwardWith huge amounts of money being invested in securities during the longest and biggest bull market in American history, who became involved in joining the feeding frenzy? Group of answer choices A.Politicians B.Small time investors C.Organized crime D. Golden Sachsarrow_forward
- Imagine a scenario in which the fashion industry is suffering from monopolistic price gouging and a dwindling demand (due to the existence of sweatshops and environmentally unfriendly business practices). A hypothetical situation such as this is likely to cause high unemployment in the fashion industry. Question: What could the government do to correct this market failure? Explain what they could do and include a diagram as well.arrow_forwardEconomics In a bygone day, airlines issued discount tickets to students who would be willing to fly on a particular day,with no notice, at a discounted price, one needed to show proof of being of student. The students would have to fly "standby", if and only if there was an available seat, only on that day. Students were able to obtain these tickets, make fictitious reservations, cancel the reservations at the last minute, and secure a seat on the flight at a discounted price. Answer the following questions. a Is this a form of price discrimination? Why? Include in your analysis differing levels of elasticity, if relevant, and any other feature b. Why would an airline use this practice? Provide a dollar and cents example. The airlines caught up with this scheme and ended it. What principal of price discrimination did the students violate so as to end it?arrow_forwardmonopolyStart from a market where a monopoly prevails. Select the option or options below that are correct. Select one or more options: a-The monopolist maximizes profit where MR = MC b-A monopolist always has the opportunity to make a profit c-The individual monopolist has no market power as it meets a completely elastic demand. d-The monopolist will charge a higher price than the marginal cost of the selected quantity. e-The monopolist is free to choose the price charged for a given quantity because consumers have no competitor to go toarrow_forward
- Econ Airlines (EA) flies only one route: Edinburgh – London. The demand for each flight is Q = 500 − P. EA’s cost of running each flight is £30,000 plus £100 per passenger. a. What is the profit-maximizing price that EA will charge? How many people will be on each flight? What is EA’s profit for each flight?arrow_forwardThe opportunity cost of a transaction is the profit you must give up to pursue it. What are two examples from the business world that illustrate this truth? Note:- Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism. Answer completely. You will get up vote for sure.arrow_forward1. market niche and focused strategies are the same thing.true or false? Explain it early and correctly. Not copy paste anything from anywhere.arrow_forward
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