NSU MC7

Question 1
4 out of 4 points

A firm selling in two markets is practicing price discrimination

Selected Answer:
b.
when it is charging different consumers different prices and the price difference is not based upon cost differences.

Question 2
4 out of 4 points

To maximize profit a price discriminating firm should

Selected Answer:
d.
both a and c

Question 3
0 out of 4 points

If a firm is selling a product in two markets, A and B, and the marginal revenue in A is $25 and the marginal revenue in B is $20, the firm should

Selected Answer:
a.
charge a higher price in A where MR is higher

Question 4
4 out of 4 points

The ability of a monopoly to charge a price that exceeds marginal cost depends on

Selected Answer: the price elasticity of demand.

Question 5
4 out of 4 points

The next 2 questions refer to the following:

A news magazine offers students a discount on the regular subscription rate. The total number of subscriptions is optimal, and, at the current prices, the marginal revenue from the last subscription sold to a student is $6, while the marginal revenue from the last subscription sold to a regular customer is $10. In order to maximize profit, the magazine should

Selected Answer: offer students a lower discount (raise the price to students).

Question 6
4 out of 4 points

If the magazine sells one more subscription to a regular customer and one less subscription to a student:

Selected Answer: profit will increase $4

Question 7
0 out of 4 points

In order to maximize profit, a firm producing two goods that are related in consumption should choose the levels of output at which

Selected Answer: total marginal revenue equals the marginal cost of each good.

Question 8
4 out of 4 points

Gus has 20 acres of land in cultivation and is