Microeconomics

Declining-block quantity discrimination makes sense if A) buyers of s

Declining-block quantity discrimination makes sense if A) buyers of smaller quantities are more price sensitive than buyers of larger quantities. B) buyers of smaller quantities are less price sensitive than buyers of larger quantities. C) demand for the good is perfectly elastic. D) the lower price for larger quantities encourages all consumers to purchase the […]

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Date: September 9th, 2020

If a firm sells to two distinct identifiable markets and resale is imp

If a firm sells to two distinct identifiable markets and resale is impossible, why is price discrimination more profitable than setting a single price? What will be an ideal response?   ANSWER If the firm charges a single price on the two different markets, marginal revenue in one market will exceed marginal revenue in the […]

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Date: September 9th, 2020

What is a primary difference between rebates and coupons? A) Coupons

What is a primary difference between rebates and coupons? A) Coupons allow individuals to sort themselves into the high-elasticity group after the sale. B) Neither coupons nor rebates are redeemed in high numbers. C) Rebates allow individuals to sort themselves into the high-elasticity group after the sale. D) Coupons are legal and rebates are illegal. […]

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Date: September 9th, 2020

Suppose a profit-maximizing monopoly is able to employ multimarket pri

Suppose a profit-maximizing monopoly is able to employ multimarket price discrimination. The marginal cost of providing the good is constant and the same in both markets. The marginal revenue the firm earns on the last unit sold in the market with the lower price will be A) greater than the marginal revenue the firm earns […]

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Date: September 9th, 2020