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 currently planting both soybeans and peanuts.  The last acre planted in soybeans yielded 20 bushels, and the last bushel of soybeans added $0.50 to Gus's total revenue.  The last acre planted in peanuts yielded 10 bushels and the last bushel of peanuts added $1 to Gus's total revenue.  Gus:

Selected Answer:
is maximizing profit.

Question 9
4 out of 4 points

Answer the following 5 questions based on the following situation:  
Black Diamond Tennis & Golf Club offers golf and tennis memberships to the residents of Black Diamond, Ohio, in which there are two types of families: golf-oriented families and tennis-oriented families.  There are 100 golf-oriented families and 100 tennis-oriented families in Black Diamond.  Forecasted demand prices for golf and tennis memberships by family type are given below.   There is no way to identify family types for pricing purposes, and all costs are fixed so that maximizing total revenue is equivalent to maximizing profit.  

Demand Prices (willingness to pay) for Golf and Tennis Memberships  
Type of family
Tennis membership only
Golf membership only
Tennis-oriented
$150
$50
Golf-oriented
$75
$200

 
 
 
 
If Black Diamond Tennis & Golf Club plans to offer golf and tennis memberships separately, what prices should be charged for each kind of membership if Berkely wishes to maximize profit?

Selected Answer:
either b
or c

Question 10
4 out of 4 points

How much total revenue can be generated each month under the pricing plan in the previous question?  

Selected Answer:
$35,000

Question 11
4 out of 4 points

The conditions are right for bundle pricing to increase profit at Black Diamond Tennis & Golf Club because  

Selected Answer:
Both b
and c

Question 12
4 out of 4 points

What is the optimal price to charge for a bundled tennis and golf and tennis membership?   

Selected Answer:
$200...