Monopoly and Price

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Chapter 13 – In Class Questions and Answers

  [pic] 
Figure 13-7
 
1. Figure 13-7 shows that by selling 200 pictures the firm will  A. break even.
B. incur a loss.
C. have no fixed costs.
D. earn a profit.
E. have no variable costs.
 
2. According to Figure 13-7, how much profit will the firm make if it sells 400 pictures?  A. $32,000
B. $35,000
C. $48,000
D. $0
E. $20,000
 
3. Figure 13-7 shows that by selling 800 pictures the firm will  A. earn a profit.
B. have no variable costs.
C. break even.
D. incur a loss.
E. have no fixed costs.
 
4. Figure 13-7 is drawn to show that variable costs are smaller than fixed costs when the firm sells  A. 1000 pictures.
B. 1200 pictures.
C. 400 pictures.
D. 900 pictures.
E. There is not enough information to determine this.
 
5. A company that manages apartments decides to buy 17 new dishwashers at a list price of $750 each as replacements for old dishwashers in a small apartment complex it owns. Because the company is buying more than 10 dishwashers, it is eligible for a $150 per unit quantity discount. Financing charges total $20 per unit. The company gets $10 per dishwasher for the 17 dishwashers traded in. What is the actual price the company will pay for each dishwasher?  A. $600

B. $610
C. $590
D. $730
E. $760
 
6. Creative marketers engage in _____, the practice of simultaneously increasing product and service benefits and maintaining or decreasing price.  A. value-pricing
B. revenue sharing
C. quantitative analysis
D. diminishing returns
E. cost-plusing
 
7. Consumers will often make comparative value assessments. That is, the consumer will judge one product or service against other alternatives or substitutes. In doing so, a "_________" emerges, which involves comparing the prices and benefits of substitute items.  A. comparative value

B. reference value
C. differential value
D. assessed value
E. none of the above
 
8. A buying situation can involve comparing the costs and benefits of substitute items - such as real sugar to the sugar substitute Equal which, although more expensive than sugar, is purchased by many consumers because it contains no calories. This situation involves the consumer considering:  A. price elasticity of demand.

B. a break-even analysis.
C. a reference value.
D. a marginal analysis.
E. a profit equation.
 
9. Pharmacist and new father Kenneth Kramm wanted his son to take his medicine, but it was a battle. As a result Kramm developed FLAVORx, a liquid medicine-flavouring system that can mask the taste or smell of medicine. FLAVORx tastes of strawberry or grape and has no effect on the medicinal value of the drug to which it is added. It is the first product of its kind. Because Flavorx is in the _____ stage of the product life cycle, the price of the medicine-flavouring system should be _____ than the price that would usually be charged.  A. growth; higher

B. introductory; higher
C. maturity; lower
D. introductory; lower
E. growth; lower
 
10. Imagine you have some extra cash and would like to invest in something that will give you some extra money while you look for a job after graduation. If you invest $177 in a black-pawed Zip (a cat) Beanie Baby, you should remember that its price is most closely tied to:  A. the price a decade ago because of long-term trend factors. B. the price at the same time last year because of seasonal factors. C. supply and demand.

D. the relation of its changing price to gross domestic product. E. whether it is listed on the eBay website.
 
11. The competitive market situation in which the few sellers are sensitive to one another's prices is called:  A. pure competition.
B. oligopoly.
C. pure monopoly.
D. oligopolistic competition.
E. monopolistic competition.
 
12. Go to any Dominion supermarket and walk to the cereal aisle. You will notice four brands - Kellogg's, Quaker, General Mills, and Post-seem to occupy most of the shelf space. These cereals...
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