chap 14 econ

Price discrimination can be defined as:

Which of the following is an example of price discrimination?

In general, price discrimination exists because:

To maximize profit, the monopolist should set a:

Which of the following conditions would prevent a firm from setting different prices in different markets?

Under perfect price discrimination:

A top performing used car salesman is able to sell his cars to each customer at their maximum willing to pay, a practice known as:

Which of the following is one of the characteristics a business must possess in order to practice price discrimination?

Hewlett Packard's pricing scheme is to sell printers at relatively low prices and ink cartridges at relatively high prices. This practice is known as:

Airlines try to differentiate their customers by willingness to pay based on:

A business that price discriminates will generally charge some customers more than marginal cost, and it will generally charge other customers less than marginal cost.

Two customers, Fred and Lamont, walk into a Grady's Used Pickups. Who probably has a more inelastic demand for one of Grady's pickups: people like Lamont, who are good at shopping around, or people like Fred, who know what they like and just buy it?

Who probably gets charged more for a Hertz rental car: Someone who reserves a car online weeks before a trip, or someone who walks up to a Hertz counter after he walks off a 4-5 hour airplane flight?

Where will you see more price discrimination: In monopoly-type markets with just a few firms or in competitive markets with many firms?

When both kinds of people, the Convenience Shoppers and the Bargain Shoppers, are shopping at the same Wal-Mart, who is more likely to stick to their prearranged shopping list rather than splurging on something on a whim?

Which group does Wal-Mart have monopoly power over?

When arbitrage is easy in a market of would-be price discriminators, who is more likely to get priced out of the market: those with elastic demand or those with inelastic demand?

If Congress passed a privacy law making it illegal for colleges to ask for parents' tax returns, would that tend to help students from high-income families or students from low-income families?

When will a monopoly create more output: When the government bans price discrimination or when the monopoly is allowed to and can perfectly price discriminate?

Some razors, like Gillette's Fusion and Venus razors, have disposable heads. The razor comes with an initial pack with a razor handle plus three or four heads; after that, you need to buy refills separately. Where do you think Gillette gets more revenue: By selling the initial pack or by selling the refills?

Where are you more likely to see businesses "bundling" a lot of goods into one package: In industries with high fixed costs and low marginal costs (like computer games or moviemaking), or in industries with low fixed costs and high marginal costs (like doctor visits, where the doctor's time is expensive)?

Isn't it surprising that movies, with tickets that cost around $10, often use vastly more economic resources than stage plays where tickets can easily cost $100? Compare, for example, a live stage performance of Shakespeare's Hamlet with a movie of Hamlet. In which field is the marginal cost of one more showing lower: on stage or on screen?

"Bundling" in a movie or stage performance might show up in the form of adding special effects, expensive actors, or fancy costumes: Some customers might not be too interested in an Elizabethan revenge drama, but they show up to see Liam Neeson waving an authentic medieval dagger. Is it better to think of these extra expenses as "fixed costs" or "marginal costs?"

n which setting will it be easier for a business to cover its total costs: In a "bundled" stage production or in a "bundled" movie production?