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ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN: 9780190931919
Author: NEWNAN
Publisher: Oxford University Press
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
Transcribed Image Text:QUESTION 6
Which of the following was insight regarding optimal pricing that we gleaned from behavioral economics?
O Make costs lump sum (integrate the costs into one cost) and separate allof the benefits of a purchase (separate the gains from an
exchange).
O Consumers always act rationally in their consumption decisions.
O Expectations about products' prices don't matter for consumer behavior - all that matter's is the price they actually face,
O Default choices for consumers don't matter for their behavior.
QUESTION 7
Which of the following are the conditions for a firm to be able to profitably engage in bundlhpg?.
O There is variation in consumers' willingness and abilities to pay for the goods, and consumers' valuations of the goods are positively
correlated.
O Consumers must like the bundled goods relatively equally.
Consumers' preferences across the goods are relatively consistent with each other.
O There is variation in consumers' willingness and abilities to pay for the goods, and consumers' valuations of the goods are negatively
correlated.
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