Question 1

Bio seeds offers free genetically modified seeds (GMS) to farmers in developing countries the first season. The land accepts only GMS in any other cropping season. So providing free seeds in the first season is a strategic way to

Accepted Answer

By providing free seeds initially, Bio seeds ensures that farmers become dependent on their genetically modified seeds for future planting, thereby regulating and securing future demand for their products.

Question 2

Price discrimination is usually defined as selling a product to different customers at:

Accepted Answer

Price discrimination involves selling the same product to different customers at different prices, even if the cost of providing the service is the same for all customers. The key element of price discrimination is that different customers are charged different prices for the same product or service, even if the cost of providing the service is the same.

Question 3

Third degree price discrimination is defined by selling:

Accepted Answer

Third degree price discrimination involves charging different prices to different groups of customers. This could be based on factors such as age, income, location, or any other characteristic that allows the seller to differentiate between groups. The goal is to maximize profits by charging each group of customers the highest price they are willing to pay.

Question 4

Season tickets for sporting events is an example of:

Accepted Answer

Season tickets for sporting events is an example of bundling because it involves selling multiple products or services together at a single price.

Question 5

A company might charge a customer different prices per unit, depending upon the number of units purchased. This is called:

Accepted Answer

Block pricing is a strategy in which a company charges different prices per unit based on the volume of units purchased. For example, a company might charge $5 per unit for the first 10 units, but then lower the price to $3 per unit for any additional units purchased. This is a form of price discrimination, but differs from other forms in that it is based on quantity rather than individual characteristics of the customer.

Question 6

Many college basketball programs require alumni to join a booster club before they can buy season tickets. This is an example of:

Accepted Answer

The requirement to join the booster club before being able to purchase season tickets is an example of a two-part tariff. A two-part tariff involves charging a fixed fee for the right to purchase a product, in addition to a per-unit price for the product itself. In this case, the fixed fee is the membership in the booster club and the per-unit price is the cost of the season tickets.

Question 7

Price discrimination requires that different customers have different levels of price sensitivity and that:

Accepted Answer

Price discrimination involves charging different prices to different customers based on their willingness to pay. This requires that customers cannot resell the product amongst themselves because if they could, they would purchase at the lower price and resell it to customers who would have otherwise paid the higher price. The other options (A, C, and D) are not necessarily required for price discrimination to occur.

Question 8

A customer pays an admission fee to get into the local YMCA, and also a monthly membership fee. This is called:

Accepted Answer

The customer is paying a fixed admission fee (one-time) and a recurring monthly membership fee. This is an example of a two-part tariff pricing strategy where the customer is charged a fixed fee for access to the facility and then a variable fee based on the usage or membership.

Question 9

In the 1950s and 1960s, cigarette company representatives stood at the edge of University campuses and gave away free cigarettes to anyone who would take them. This policy:

Accepted Answer

The policy of giving away free cigarettes was aimed at buying customer goodwill for cigarette companies.

Question 10

In the 1950s and 1960s, cigarette company representatives stood at the edge of University campuses and gave away free cigarettes to anyone who would take them. This policy:

Accepted Answer

Giving away free cigarettes helped to create addiction among students, which would lead to future purchases and ensure long-term customers for the tobacco companies.

Question 11

Under Block pricing, a company might

Accepted Answer

Block pricing involves charging different prices per unit based on the number of units purchased. The price per unit decreases as the customer buys more units, which encourages customers to purchase in larger quantities. This type of pricing is commonly used for bulk purchases or subscriptions where customers can save money by committing to a larger purchase.

Question 12

Electric generator companies did not raise their prices when there was a huge demand for their products, due to a power shortage. The companies were:

Accepted Answer

The companies were likely concerned with maintaining a positive reputation and ensuring future demand for their products. Raising prices during a power shortage could create negative public perception and harm their reputation, potentially leading to a decrease in future demand for their products.

Question 13

Hickey-Freeman will sell a second suit to the same person for a $100 discount. This attempt to take advantage of an individual's falling additional utility for more consumption is called:

Accepted Answer

Block pricing involves offering a discount on additional units purchased, which aligns with the scenario of selling a second suit at a discount to the same person.

Question 14

The Robinson-Patman Act limits the ability of the firms to

Accepted Answer

The answer of The Robinson-Patman Act limits the ability of...

Question 15

The higher the price elasticity  the

Accepted Answer

The answer of The higher the price elasticity  the
...

Question 16

The cost plus pricing formula tends to ignore:

Accepted Answer

The answer of The cost plus pricing formula tends to...

Question 17

Calculate the markup price if MC = $10.00 and price elasticity equals 1.7.

Accepted Answer

The answer of Calculate the markup price if MC =...

Question 18

Many firms offer substantial rebates by mail or coupons for discounts at the point of sale. The people who use the rebates or coupons have _______ than the people who don't use them.

Accepted Answer

People who use rebates or coupons are typically more price-sensitive because they actively seek out ways to save money on their purchases. They are willing to go through the hassle of redeeming the rebate or coupon in order to save money, indicating that price is an important factor in their purchasing decisions.

Question 19

In the 1950s and 1960s, cigarette company representatives stood at the edge of University campuses and gave away free cigarettes to anyone who would take them. This policy:

Accepted Answer

By giving away free cigarettes, cigarette companies were able to establish brand identity and potentially create loyal customers who would continue to purchase their products. This was a common marketing tactic at the time, but it is now widely recognized as a harmful and unethical practice.

Question 20

Disney sold The Little Mermaid for $20.00 with a $5.00 mail in rebate. The rebate should have:

Accepted Answer

The $5.00 mail in rebate offered an incentive for customers to purchase The Little Mermaid, which would likely increase overall customer demand.

Quiz 7: Pricing With Market Power

Bio seeds offers free genetically modified seeds (GMS) to farmers in developing countries the first season. The land accepts only GMS in any other cropping season. So providing free seeds in the first season is a strategic way to

Price discrimination is usually defined as selling a product to different customers at:

Third degree price discrimination is defined by selling:

Season tickets for sporting events is an example of:

A company might charge a customer different prices per unit, depending upon the number of units purchased. This is called:

Many college basketball programs require alumni to join a booster club before they can buy season tickets. This is an example of:

Price discrimination requires that different customers have different levels of price sensitivity and that:

A customer pays an admission fee to get into the local YMCA, and also a monthly membership fee. This is called:

In the 1950s and 1960s, cigarette company representatives stood at the edge of University campuses and gave away free cigarettes to anyone who would take them. This policy:

In the 1950s and 1960s, cigarette company representatives stood at the edge of University campuses and gave away free cigarettes to anyone who would take them. This policy:

Under Block pricing, a company might

Electric generator companies did not raise their prices when there was a huge demand for their products, due to a power shortage. The companies were:

Hickey-Freeman will sell a second suit to the same person for a $100 discount. This attempt to take advantage of an individual's falling additional utility for more consumption is called:

The Robinson-Patman Act limits the ability of the firms to

The higher the price elasticity the

The cost plus pricing formula tends to ignore:

Calculate the markup price if MC = $10.00 and price elasticity equals 1.7.

Many firms offer substantial rebates by mail or coupons for discounts at the point of sale. The people who use the rebates or coupons have _______ than the people who don't use them.

In the 1950s and 1960s, cigarette company representatives stood at the edge of University campuses and gave away free cigarettes to anyone who would take them. This policy:

Disney sold The Little Mermaid for $20.00 with a $5.00 mail in rebate. The rebate should have: