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Chris finds it is profitable to raise cows and produce meat,

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1. (Points: 1);Chris finds it is profitable to raise cows and produce meat, cheese and milk because he enjoys;a. Economies of scale;b. Economies of scope;c. Working outside in the sun;d. None of the statements associated with this question are correct;Save Answer;2. (Points: 1);Studying perfectly competitive markets is useful because;a. Many small firms are price takers;b. Identifies the importance of product differentiation in increasing profits;c. Both statements A & B are correct;d. None of the statements associated with this question are correct;Save Answer;3. (Points: 1);What will likely happen to the demand for and price of the patent-holder's product when the patent runs out?;a. Demand and price will increase;b. Demand will decline;c. Nothing;d. New companies will enter the market and increase the price for the product;Save Answer;4. (Points: 1);What will happen after the patent on a drug expires?;a. The patent holder will leave the market;b. The patent holder will retain its status as a monopoly but produce at a lower price;c. Some firms that produce generic drugs will enter the market;d. None of the statements associated with this question are correct;Save Answer;5. (Points: 1);If firms are price takers but there are significant barriers to entry ? higher profits probably will exist.;TrueFalse;Save Answer;6. (Points: 1);Which of the following statements is not correct about monopoly?;a. A monopolist generally faces a downward sloping demand curve;b. Monopolists always make positive profits in the long-run;c. A monopoly may make negative profits in the short-run;d. There is no close substitute for a monopoly's product;Save Answer;7. (Points: 1);In the long-run, monopolistically competitive firms can charge prices;a. Equal to marginal cost;b. Below marginal cost;c. Equal to the minimum of average total cost;d. Above their minimum of average total cost;Save Answer;8. (Points: 1);Most pricing theories assumes rivals will;a. Keep their output and prices constant;b. Increase their output whenever a firm increases its output;c. Decrease output whenever a firm increases its output;d. Follow the learning curve;Save Answer;9. (Points: 1);Generally, substantially higher profitability in an industry encourages new firms to enter the industry.;TrueFalse;Save Answer;10. (Points: 1);Monopoly power allows to sell any quantity of product that you want to sell at any price you specify.;TrueFalse;Save Answer;11. (Points: 1);If firms compete in a market that is not perfectly competitive, then each firm views the;a. Output of the rival as given;b. Prices of rival firms products potentially will respond to changes made by the firm;c. Profits of rivals as given;d. All of the statements associated with this question are correct;Save Answer;12. (Points: 1);Collusion in oligopoly is difficult to achieve because;a. It is prohibited by law;b. Every firm has an incentive to cheat given that others follow the agreement;c. Firms usually take care of consumers' interests as a decision priority;d. It is prohibited by law and every firm has an incentive to cheat given that others follow the agreement;Save Answer;13. (Points: 1);Which of the following is true;a. Prices have a tendency to remain in a narrow band because competitors will react to each other?s actions;b. If there is only one firm in a market, prices must be above marginal cost and the total consumer surplus is captured;c. All firms in monopolistic competitive markets make a profit of some time;d. None of the statements associated with this question are correct;Save Answer;14. (Points: 1);Which of the following is true?;a. New products provide the best opportunities to utilize pricing theories;b. Prices are constrained because competitors will react to the changes introduced by others;c. Brand loyalty is important if you desire to charge a higher price for your differentiated product;d. All of the statements associated with this question are correct;Save Answer;15. (Points: 1);In the presence of large sunk costs in physical plants due to the nature of the product, which of the following market structures generally is in effect?;a. Perfect Competition;b. Oligopoly;c. Bertrand Quasi Perfect Market;d. Monopoly;Save Answer;16. (Points: 1);Which of the following is a feature of a contestable market?;a. Low barriers to entry;b. Consumers are sensitive to changes in price;c. Existing firms have no pricing power;d. All of the statements associated with this question are correct;Save Answer;17. (Points: 1);Setting prices by shopping the competition and using the lowest price found is useful when you have better margins or have high volume sales so any one item will not significantly impact your total profits.;TrueFalse;Save Answer;18. (Points: 1);Which of the following is true about brand loyalty?;a. The lower the percentage of a person?s income is spent on the product-the easier it is to break loyalty;b. The higher the perceived value and cost of the product, coupons become extremely important in maintaining loyalty;c. Advertising is very important in educating and retaining customers;d. Market structure has an important impact on loyalty;Save Answer;19. (Points: 1);Your business strategy is one of the key determinates of your pricing policy.;TrueFalse;Save Answer;20. (Points: 1);The prices charged by the firm are affected by which of the following?;a. Process technologies employed;b. Desirability of the product to the customer;c. Business strategies and cost structure of the competition;d. All the statements associated with this question are correct;Save Answer;21. (Points: 1);What is true about oligopolistic markets;a. Oligopolistic markets are the basic type of competition faced;b. Products usually are commodities with little differentiation;c. Oligopoly is the most complicated type of market structure;d. Both a and c;Save Answer;22. (Points: 1);A decrease in a firm's marginal cost will cause;a. Competitors to duplicate their processes;b. The firm to want to increase output at a slightly lower price;c. Competing firms to increase their output;d. The firm to reduce output because they are already satisfied with their profits;Save Answer;23. (Points: 1);A local video store estimates their average customer's demand per year is Q = 7 - 2P, and knows the marginal cost of each rental is $0.5. How much should the store charge for an annual membership in order to extract the entire consumer surplus via an optimal two-part pricing strategy?;a. $9;b. $10;c. $11;d. $12;Save Answer;24. (Points: 1);The special cost structure that is necessary for a firm to adopt a peak-load pricing policy is?;a. Economies of scale;b. Economies of scope;c. Constant marginal cost;d. Limited capacity;Save Answer;25. (Points: 1);Which group of policies aims at discouraging rivals to enter a price war?;a. Price matching, beat-or-pay, and randomized pricing;b. Price matching, brand loyalty, and commodity bundling;c. Randomized pricing, price discrimination, and cross subsidization;d. Load-peak pricing, two-part pricing, and price matching;Save Answer;26. (Points: 1);Suppose two types of consumers buy suits. Consumers of type A will pay $100 for a coat, and $50 for pants. Consumers of type B will pay $75 for a coat, and $75 for pants. The firm selling suits faces no competition and has a marginal cost of zero. If the firm can identify each consumer type and can price discriminate, what is the optimal price for a pair of pants?;a. Charge both types $150;b. Charge both types $75;c. Charge type A consumers $50, and type B consumers $75;d. Charge type A consumers $50, and type B consumers $50;Save Answer;27. (Points: 1);The average consumer at a firm with market power has an inverse demand function of P = 10 - Q. The firm's cost function is C = 2Q. If the firm engages in two part pricing, what is the optimal fixed fee to charge each consumer?;a. $2;b. $32;c. $64;d. None of the statements associated with this question are correct;Save Answer;28. (Points: 1);Suppose two types of consumers are buying clothes. Consumers of type A will pay $100 for a sweater, and $50 for a shirt. Consumers of type B will pay $75 for a sweater, and $75 for a shirt. The firm faces no competition and has a marginal cost of zero. The optimal commodity bundling strategy is;a. Charge $150 for both items;b. Charge $75 for both items;c. Charge $100 for both items;d. Charge $125 for both items;29. (Points: 1);Suppose two types of consumers buy suits. Consumers of type A will pay $100 for a coat, and $50 for pants. Consumers of type B will pay $75 for a coat, and $75 for pants. The firm selling suits faces no competition and has a marginal cost of zero. If the firm charges $75 for pants and $75 for a coat, the firm will sell a coat to;a. Type A consumers;b. Type B consumers;c. Type A consumers and type B consumers;d. None of the statements associated with this question are correct;Save Answer;30. (Points: 1);Interdivisional transfer pricing of products should focus on what is the profit maximizing price for the first plant so it can be profitable.;TrueFalse;Save Answer;31. (Points: 1);To avoid the problem of double marginalization;a. Transfer prices must be set that maximize the overall value of the firm rather than the profits of the upstream division;b. Firms should put more emphasis on vertical integration;c. Firms should engage in two-part pricing;d. Firms should engage in commodity bundling, unless it is possible to engage in either first or second degree price discrimination;Save Answer;32. (Points: 1);Suppose you are an analyst for the Coca-Cola Company. An individuals' inverse demand for Coca-Cola is estimated to be P = 98 - 4Q (in cents). If Coca-Cola is produced according to the following cost function C(Q) = 1,000 + 2Q (in cents), compute the optimal price and the number of cans to sell as a single package.;a. $1200 per package and 12 cans;b. $12 per package and 24 cans;c. $11.52 per package and 12 cans;d. $15 per package and 16.67 cans

 

Paper#29824 | Written in 18-Jul-2015

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