管理经济学第七版英文教辅 chapter 10

ManagerialEconomics^7e(Keat)Chapter10SpecialPricingPracticesMultiple-ChoiceQuestionsAcartelisdefinedtobeanyoligopolisticindustrywithfewerthan4firms.aformofoligopolyinwhichfirmsagreetosellatdifferentpriceslikeinmonopolisticcompetition.aformofoligopolyinwhichfirmsformallyagreetoestablishacommonstrategy,oftenacommonprice,ineffectactinglikeamonopoly.aformofoligopolyinwhichfirmsagreetocompetewitheachotheronanequalbasis.Answer:CDiff:1Asuccessfulandstablecartelcanbeestablishediftherearemanyfirmsproducingastorableproduct.manyfirmsproducingaperishableproduct.afewfirmsproducingastorableproduct.afewfirmsproducingaperishableproduct.Answer:CDiff:2Allofthefollowingareconditionswhicharefavorabletotheformationofcartelsexcepttheexistenceofasmallnumberoffirms.geographicproximityoffirms.homogeneityoftheproduct.easyentryintotheindustry.Answer:DDiff:2Pricesunderanidealcartelsituationwillbeequaltomonopolypetitiveprices.pricesundermonopolisticcompetition.marginalcost.Answer:ADiff:2Acartelpricewillbeestablishedatthequantitywheretotalcostequalstheindustrytotalrevenue.averagecostequalstheindustryrevenue.thesumofthemembers*marginalcostsequalsindustrymarginalrevenue.marginalcostequalsindustryprice.Answer:CAmonopolistsellstotwoconsumergroups,studentsandnon-students.Demandforstudents:Q=500-1/2PDemandfornon-students:Q=750-2PMC=20Findtheprofit-maximizingprice/quantitycombinationineachmarketifthegroupscanbeseparated.Answer:Students:P=1000-2QMR=1000-4QSetMR=MC.20=1000-4Q245=Q,P=$510Non-students:P=375-1/2QMR=375-QSetMR=MC.20=375-Q355=Q,P=$197.50McDonald'schargesahigherpriceforaBigMacinNewYorkCitythanitdoesinasmalltowninIowa.Isthisanexampleofthird-degreepricediscrimination?Explain.Answer:No,ornotnecessarily.Costsdifferbetweenthetwomarkets,becauselandismoreexpensiveinNewYorkCity.Thusthehigherpricereflectsthat.Somechargethatthird-degreepricediscriminationisunfairorthatitreducessocialwelfare.Whydoeschargingonegroupalowerpricehurtanyone?Answer:There'sanequityissueaboutchargingdifferentpricestodifferentpeople,buttherealsocialwelfareissueisnotaboutchargingalowerpricetoonegroup;it'saboutchargingahigherpricetotheother.Ifthefirmchargedasingleprice,itwouldbesomewhereinbetweenthetwogroupprices,inmostcases.Sosomecustomerswhowouldbeabletobuyatalowerpriceinthecombinedmarketpaymore(ordonotbuyatall)intheseparatedmarket.FirmsthatmakegamesystemslikePlaystationandNintendotypicallychargeapriceclosetoaveragecostonthegamesystemitself,anddonotchangethatpriceevenwhenthesystemsarescarceordemandincreases.Whymightthisbeaprofit-maximizingstrategy?Answer:Thesefirmsaresellingtwoproducts,thesystemsandthegames.Thesearecomplementaryproducts.Iftheyincreasethepriceofthesystems,theyreducethedemandforgames(andgamesarerepeatpurchasesratherthanone-timepurchases).Additionally,thesystemisthe"hook,”orthelossleaderthatdrawscustomersin.Onceyouhavethesystem,theswitchingcostofmovingtoanothersystemissignificant.Thusthesystemsarecheap,andthegamesareexpensive.IntheSundaynewspaper,thereareusuallycouponsthatyoucanclipandtaketothestoretosavemoneyonproducts.Anyonecanbuyanewspaper,andthevalueofthecouponseasilyexceedsthepriceofthenewspaperformostconsumers.Isthisanexampleofpricediscrimination?Explain.Answer:Yes,itis.Consumerswithmoretimearelikelytohaveamoreelasticdemandforproducts,andthustheyarewillingtoclipthecoupons(andmaynotbuyexceptatthelowerprice).Otherconsumerswithlesstimewontdealwiththecouponsandthuswillpayahigherprice.Thisisessentiallythesameideaasmoviematineepricing.Woulditevermakesenseforafirmtochargeapriceatorbelowthecostoftheproduct?Answer:Thismightbeanexampleofpenetrationpricinginwhichthefirmistryingtogainmarketshare.(Twootherreasonsnotdiscussedinthetext:limitpricingtoprevententry,andpredatorypricingtodriveoutrivals.)Superstaractorstypicallygetcontractsthatspecifythattheygetapercentageofnthegross/thetotalrevenuesthatthemoviebringsin.Whymightactorswantcontractsstructuredthatway?Whymightproducersbewillingtoagreetothat,andhowdoesthismakethegoalsofactorsandproducersdifferent?Answer:Actorswanttomaximizerevenuewiththissortofcontract,whileproducerswishtomaximizeprofit.Itisclearlyadvantageoustotheactor,sincecostoverrunswon'timpactwhattheyreceive.Butitmightalsosuitproducers,becauseifactorsareinterestedinmaximizingrevenue,theyhaveanincentivetopromotethemovieandtrytoincreasesales(andtodoaproductjob).Thismightbemoreofanincentivethanacutoftheprofits,overwhichtheyhavelesscontrol.Afirminanoligopolisticindustryhasthefollowingdemandandtotalcostequations:P=600-20QandTC=700+160Q+15Q2Calculate:quantityatwhichprofitismaximizedmaximumprofitquantityatwhichrevenueismaximizedmaximumrevenuemaximumquantityatwhichprofitwillbeatleast$580maximumrevenueatwhichprofitwillbeatleast$580Answer:Ifrevenueandcostschedulesarecalculated:a.6;b.680;c.15;d.4500;e.8;f.3520Ifresultsarecalculatedwithequations:a.6.286;b.682.86;c.15;d.4500;e.8;f.3520Amonopolisticfirmoperatesintwoseparatemarkets.NotradeispossiblebetweenmarketAandmarketB.Thefirmhascalculatedthedemandfunctionsforeachmarketasfollows:MarketAp=15-Q;MarketBp=11-QThecompanyestimatesitstotalcostfunctiontobeTC=4Q.Calculate:quantity,totalrevenueandprofitwhenthecompanymaximizesitsprofitandchargesthesamepriceinbothmarketsquantity,totalrevenueandprofitwhenthecompanychargesdifferentpricesineachmarketandmaximizesitstotalprofitAnswer:Ifrevenueandcostschedulesarecalculated:Q=9;p=8.5;TR=76.5;TC=36;profit=40.5MarketA:Q=5to6;p=9to10;TR=50to54;TC=20to24;profit=30MarketB:Q=3to4;p=7to8;TR=24to28;TC=12to16;profit=12Combinedprofit=42Ifequationsareused:Q=9;p=8.5;TR=76.5;TC=36;profit=40.5MarketA:Q=5.5;p=9.5;TR=52.25;TC=22;profit=30.25MarketB:Q=3.5;p=7.5;TR=26.25;TC=14;profit=12.25Combinedprofit=42.5Brieflydescribetheconditionsunderwhichcartelswillbeformed.Answer:Anindustrywithrelativelyfewfirmssellingidenticalorverysimilarproducts,whereentryisverydifficultandcoststructuresareverysimilar.Also,geographicproximityofthefirmsisveryhelpful.ExplainthereasonsfirmsmightfollowtheBaumolmodelofmaximizingrevenuesubjecttoachievingaminimumlevelofprofits.Answer:Firmsmightwishtoincreasetheirmarketshareswithintheindustry,managers*powerandprestigetendtogrowwithanincreaseinthesizeofabusiness*levelofoperations,eschewingprofitmaximizationmightavoidnewfirmsenteringtheindustryand/orpressureforgovernmentregulation,andincreasesinthescaleofafirm'slevelofoperationmightpermitcapturingcosteconomiesofscalethroughgreatermarketpowertoextractlowerpricesfromthefirm'ssuppliersofinputs.Describethecircumstancesunderwhichaproducerofjointproductsinfixedproportionsmightnotsellallofoneoftheavailablejointproductsattheprofit-maximizinglevelofoperations.Answer:Attheprofit-maximizinglevelofoutput,thedemandforthatjointproductwouldbesuchthatthepriceatwhichitcouldbesoldwouldinvolvenegativemarginalrevenueand,hence,areductionintotalprofits.Thussaleswouldbelimitedtoanamountwherethelastunitsoldbringsinzeromarginalrevenueandtheremainingunitswouldnotbesold(theycouldbeheldforsaleatalaterdateifthepricemightbeexpectedtoincreaseandifthecostsofholdingtheunsoldproductwerelessthepresentvalueoftheexpectedrevenue;otherwisetheunsoldproductwouldbedestroyed).Diff:2Cartelagreementstendtobreakdownduringeconomicdownturns.becauseofprice"chiselingHbyoneormoremembers.whenthereisovercapacityintheindustry.AlloftheaboveAnswer:DDiff:2Thepositionofacartelwillbecomeweakerifthereisexcess-capacityamongthefirmsbelongingtothecartel.minimumAnswer:DDiff:1Barometricpriceleadershipexistswhenonefirmintheindustryinitiatesapricechangeandtheothersmayormaynotfollow.onefirmimposesitsbestpriceontherestoftheindustry.whenallfirmsagreetochangepricessimultaneously.whenonecompanyformsapriceumbrellaforallothers.Answer:ADiff:1Barometricpriceleadershipcanoccurwhenoligopolisticfirmscompeteonthebasisofdifferentiatedproducts.wanttoavoidpricecompetitionandviolatingantitrustlaws.trytoenforcecartelagreements.AlloftheaboveAnswer:BDiff:1Dominantpriceleadershipexistswhenonefirmdrivestheothersoutofthemarket.thedominantfirmdecideshowmucheachofitscompetitorscansell.thedominantfirmestablishesthepriceatthequantitywhereitsMR=MC,andpermitsallotherfirmstosellalltheywanttosellatthatprice.thedominantfirmchargesthelowestpriceintheindustry.Answer:CDiff:2Theoligopolisticsituationinwhichacompany'sobjectiveistomaximizerevenuesubjecttoaminimumprofitrequirementisusuallyreferredtoastheaggregatemodel.theBaumolmodel.theaggressivemodel.theMarshallmodel.Answer:BDiff:1IntheBaumolmodel,thetotalquantitysoldwillusuallybelargerthanifperfectcompetitionprevailed.iftotalcostswereminimized.ifprofitweremaximized.ifcompanieswereinterdependent.Answer:CDiff:1IntheBaumolmodel,achangeinfixedcostswillincreasetotalquantitysold.havenoeffectontotalquantitysold.decreasetotalquantitysold.haveaneffectontotalquantitysold.Answer:DDiff:2Inorderforpricediscriminationtoexistmarketsmustbecapableofbeingseparated.marketsmustbeinterdependent.differentdemandpriceelasticitiesmustexistindifferentmarkets.demandpriceelasticitiesmustbeidenticalinallmarkets.BothAandCAnswer:EDiff:3Theresultforthesellerofbeingabletopracticepricediscriminationwillbehigherprofits.lowerdemandelasticity.lowerquantitysold.costminimization.Answer:ADiff:1Thepracticebyamonopolistofchargingeachbuyerthehighestpricehe/sheiswillingtopayiscalledfirst-degreediscrimination.second-degreediscrimination.third-degreediscrimination.fourth-degreediscrimination.Answer:ADiff:1Whenstateuniversitieschargehighertuitionfeestoout-of-statestudentsthantolocalstudents,theuniversitiesarepracticingfirst-degreediscrimination.second-degreediscrimination.third-degreediscrimination.fourth-degreediscrimination.Answer:CDiff:2Thefollowingarepossibleexamplesofpricediscriminationexceptpricesinexportmarketsarelowerthanforidenticalproductsinthedomesticmarket.seniorcitizenspaylowerfaresonpublictransportationthanyoungerpeopleatthesametime.aproductsellsatahigherpriceatlocationAthanatlocationB,becausetransportationcostsarehigherfromthefactorytoA.subscriptionpricesforaprofessionaljournalarehigherwhenboughtbyalibrarythanwhenboughtbyanindividual.Answer:CDiff:3Underconditionsoffirst-degreepricediscriminationproductionwillequalthatwhichwouldexistunderperfectductionwillexceedthatwhichwouldprevailunderperfectcompetition.priceswillbelowerthanunderperfectductionwillalwaysbelowerthanunderperfectcompetition.Answer:ADiff:2Second-degreepricediscriminationoccurswhendifferentpricesarechargedfordifferentblocksofservices.differentgroupsofbuyersarechargeddifferentpricesbasedontheirpriceelasticitiesofdemand.adifferentpriceischargedforeachamountofaproductpurchased.NoneoftheaboveAnswer:ADiff:2Third-degreepricediscriminationexistswhenthesellerknowsexactlyhowmucheachpotentialcustomeriswillingtopayandwillchargeaccordingly.differentpricesarechargedbyblocksofservices.whenthesellercanseparatemarketsbygeography,income,age,etc.,andchargedifferentpricestothesedifferentgroups.whenthesellerwillbargainwithbuyersineachofthemarketstoobtainthebestpossibleprice.Answer:CDiff:2Byfar,themostfrequentlyencounteredpricediscriminationisthefirst-degreepricediscrimination.second-degreepricediscrimination.third-degreepricediscrimination.fourth-degreepricediscrimination.Answer:CDiff:2Ifaproductwhichcosts$8issoldat$10,theprofitmarginis$2.25%.20%.NoneoftheaboveAnswer:CDiff:2Ifaproductwhichcosts$8issoldat$10,themark-upis$2.25%.20%.NoneoftheaboveAnswer:BDiff:2ThecorrectexpressionforcostpluspricingisPrice=Cost(1+profitmargin).Price=Cost+profitmargin.Price=Cost(1+mark-up).Price二Cost+(1+mark-up).Answer:CDiff:3Ifthedemandelasticityforaproductis-2,andaprofit-maximizingfirmsellstheproductfor$10,itsmarginalcostmustbeA)$5.B)$10.C)$15.D)$8.Answer:ADiff:3Whenmark-upequals50%andAC二MC,thendemandelasticitywillbeA)-l.B)-1.5.-2.-3.Answer:DDiff:3Thepricingofaproductateachstageofproductionastheproductmovesthroughseveralstagesiscalledtransferpricing.costpluspricing.penetrationpricing.monopolisticpricing.Answer:ADiff:1Transferpricingisamethodusedtodeterminewhetherafirmshouldmakeorbuyacomponentproduct.determinethecorrectvalueofaproductasitmovesfromonestageofproductiontoanother.minimizeamultinationalfirm'staxliabilities.AlloftheaboveAnswer:DDiff:2Acompanywhichchargesalowerpricethanmaybeindicatedbyeconomicanalysistogainafootholdinthemarketispracticingpriceskimming.psychologicalpricing.penetrationpricing.prestigepricing.Answer:CDiff:2AssumethatamultinationalcompanyproducescomponentsincountryAandshipsthemtoasubsidiaryincountryB.InordertoincreaseitsprofitsthecompanyshouldchargeahightransferpriceforthecomponentsifincometaxesincountryBarehigherthanincountryA.thecompanyshouldchargealowtransferpriceforthecomponentsifincometaxesincountryBarehigherthanincountryA.thecompanyshouldchargeahightransferpriceforthecomponentsifincometaxesincountryAarehigherthanincountryB.NoneoftheaboveAnswer:ADiff:3Revenuemaximizationoccurswhenafirmsellsatapricethatisequaltoitsminimumaveragevariablecost.whereitsmarginalrevenueisequaltoitsmarginalcostwhereitsmarginalrevenueiszero.NoneoftheaboveAnswer:CDiff:233)叮ying”isaformofpricediscriminationwhichinvolvesabuyeragreeingtopurchaseaproductatafixedpriceregardlessoftheamountpurchased.payingdifferentpricesbasedontheamountsofaproductpurchased.requiredtobuyoneproductinordertopurchasesomeotherproduct.AlloftheaboveAnswer:CDiff:2Gasolineandheatingoilareexamplesofproductswhicharejointproductsinfixedproportions.jointproductsinvariableproportions.jointproductsthatarecomplements.unrelatedtoeachother.Answer:BDiff:3Whenafirmsetsapricerelativelylowinordertoincreasethemarketshare,itisreferredaspriceskimming.limitpricing.penetrationpricing.predatorypricing.Answer:CDiff:1Whenafirmpricesitsgoodsbelowthemarginalcosttodriveawaycompetitors,itisreferredaspriceskimming.limitpricing.penetrationpricing.predatorypricing.Answer:DDiff:1Afirmusesforgoodswhichtheconsumertakesprideinowning.priceskimmingprestigepricingpenetrationpricingpredatorypricingAnswer:BDiff:1Ifamonopolistsetsalowpricetodiscouragepotentialcompetitorsfromenteringthemarket,itisreferredaspriceskimming.predatorypricing.penetrationpricing.limitpricing.Answ