Please dont answer if you are not sure Thank you Short Answer Some drinking esta
ID: 1093522 • Letter: P
Question
Please dont answer if you are not sure Thank you
Short Answer
Some drinking establishments will charge a lower cover charge (or offers of lower priced drinks) to unaccompanied females during happy hour. This is third degree price discrimination based on price elasticity of demand. What does this imply bar management assumes about the price elasticity of demand for their services to unaccompanied females versus unaccompanied males?
10 multiple
QUESTION 1
The practice of setting price by increasing the marginal or average costs of production by some percentage is referred to as:
average cost pricing.
percentage pricing.
rate-of-return pricing.
markup pricing.
0.25 points
QUESTION 2
When demand is elastic, the marginal revenue resulting from a decrease in price is:
positive.
zero.
negative.
cannot be determined without more information.
0.25 points
QUESTION 3
When the marginal revenue resulting from a decrease in price is negative, demand for the product is:
elastic.
unit elastic.
inelastic.
cannot be determined without more information.
0.25 points
QUESTION 4
At the profit-maximizing level of output, the amount by which the firm can mark up price is:
inversely related to the price elasticity of demand for item in question.
directly related to the price elasticity of demand for item in question.
totally unrelated to the price elasticity of demand for item in question.
equal to the ratio of the marginal and average costs of production.
0.25 points
QUESTION 5
Assume the price elasticity of demand for a product is -4. In this case, the firm's optimal markup is:
400 percent.
100 percent.
33 percent.
25 percent.
0.25 points
QUESTION 6
The practice of charging different prices to various groups of customers that are not based on differences in the costs of production is referred to as:
predatory pricing.
markup pricing.
discretionary pricing.
price discrimination.
0.25 points
QUESTION 7
The situation in which a firm is able to charge the maximum price consumers are willing to pay for each unit of output the firm sells is referred to as:
first-degree price discrimination.
second-degree price discrimination.
third-degree price discrimination.
fourth-degree price discrimination.
0.25 points
QUESTION 8
The situation in which a firm charges different prices for different blocks of output is referred to as:
first-degree price discrimination.
second-degree price discrimination.
third-degree price discrimination.
fourth-degree price discrimination.
0.25 points
QUESTION 9
Third-degree price discrimination refers to a situation in which:
a firm charges different prices for different blocks of output.
a firm separates markets according to the price elasticity of demand.
a firm is able to charge the maximum price consumers are willing to pay for each unit of output.
a firm divides a market into thirds and charges each segment a different price.
0.25 points
QUESTION 10
A firm's profits will be greatest when it practices:
first-degree price discrimination.
second-degree price discrimination.
third-degree price discrimination.
no price discrimination.
A.average cost pricing.
B.percentage pricing.
C.rate-of-return pricing.
D.markup pricing.
Explanation / Answer
1 markup pricing.
2 positive.
3 cannot be determined without more information
4 inversely related to the price elasticity of demand for item in question.
5 25 percent.
6 price discrimination
7 first-degree price discrimination.
8 second-degree price discrimination.
9 a firm separates markets according to the price elasticity of demand.
10 first-degree price discrimination.