[13] A price discriminating firm is currently selling its product to two groups of consumers, A and B. The price elasticity on the part of consumer group A equals -3, while the price elasticity on the part of consumer group B equals -2. Accordingly, in order to increase profit, this firm should: A. increase sales to group A and decrease sales to group B. decrease sales to group A and increase sales to group B. maintain sales at current levels. В. C. D. all of the above are possible, as not enough information is provided to determine the optimal allocation of sales across the two groups. (14] Blockaded entry occurs when the incumbent does not have to sacrifice any profit to deter entry. True False A. В. (15] Which of the following are strategie entry deterrents? engaging in price arbitrage setting long retaliatory lags differentiating your product All of the above A. В. C. D. [16] In the case of dynamic limit pricing, an incumbent gradually raises price over time in an effort to reduce the rate of entry. А. True В. False (17] Second degree price discrimination occurs when a firm divides its output into successive batches and sells each batch at a unique price. A. True В. False (18) The Sylos Postulate assumes the market price will remain the same whether or not entry occurs in the market. A. True В. False
[13] A price discriminating firm is currently selling its product to two groups of consumers, A and B. The price elasticity on the part of consumer group A equals -3, while the price elasticity on the part of consumer group B equals -2. Accordingly, in order to increase profit, this firm should: A. increase sales to group A and decrease sales to group B. decrease sales to group A and increase sales to group B. maintain sales at current levels. В. C. D. all of the above are possible, as not enough information is provided to determine the optimal allocation of sales across the two groups. (14] Blockaded entry occurs when the incumbent does not have to sacrifice any profit to deter entry. True False A. В. (15] Which of the following are strategie entry deterrents? engaging in price arbitrage setting long retaliatory lags differentiating your product All of the above A. В. C. D. [16] In the case of dynamic limit pricing, an incumbent gradually raises price over time in an effort to reduce the rate of entry. А. True В. False (17] Second degree price discrimination occurs when a firm divides its output into successive batches and sells each batch at a unique price. A. True В. False (18) The Sylos Postulate assumes the market price will remain the same whether or not entry occurs in the market. A. True В. False
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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