PRIN OF MICROECONOMICS
2nd Edition
ISBN: 9780393914085
Author: coppock
Publisher: Norton, W. W. & Company, Inc.
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Chapter 11, Problem 2SP
To determine
Examples of
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Which of the following statements about price discrimination are true?
Choose one or more:
A. One example of price discrimination is Subway charging more for its footlong subs than for its 6-inch subs.
B. One example of price discrimination is a movie theater charging a lower price for a 2:00 PM movie than it
charges for the same movie at 8:00 PM.
C. One example of price discrimination is a restaurant that provides a "senior discount" to people over age 50.
D. Price discrimination usually leads to higher total surplus than single-price monopolies, and it can even
maximize total surplus.
a
You and your friend who just graduated visit a local ice cream parlor. By showing your student id you are able to buy an ice cream cone for $1 cheaper than your friend. What type of price discrimination is this an example of?
A. First-degree price discrimination
B. Second-degree price discrimination
C. Third-degree price discrimination
D. Fourth-degree price discrimination
Which of the following would not be considered price discrimination?
1
Long distance telephone rates are cheaper late at night.
2
Airline fares are cheaper if you reserved several weeks in advance.
3
The price of a brand name prescription drug is higher than the price of a generic brand.
4
Senior citizens pay less for a movie.
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- The following present different examples of price discrimination strategies. Match up the examples with the appropriate type of price discrimination. A university athletic department requires a donation prior to purchasing season tickets. A. Third-degree price discrimination A firm identifies different groups of customers in the market and offers different prices to each group. B. First-degree price discrimination A firm identifies and charges a unique price for each consumer in the market. C. Two-part tariff. D. Second-degree price discrimination A firm bundles together different products into packages with special prices.arrow_forward33. Rodrigo gets a $1.00 discount by buying Cheerios on the end of the aisle that have a store coupon. Olivia buys the same sized Cheerios at the regular price in the cereal section. Is this price discrimination? True Falsearrow_forwardWhat is price discrimination and how it helps the firm and the consumersarrow_forward
- Price discrimination is the practice of selling goods at different prices to different consumers. The most common form of price discrimination is the practice of selling goods to different groups of customers at different prices. Many businesses offer students and senior citizens discounts not available to other customers. Firms engage in price discrimination in an effort to increase their profits. a. Identify three conditions that must be met for price discrimination to occur. b. Discuss the effectiveness of different strategies implemented to deal with the problems caused by increased road transport use in urban areas. c. 'Transportation patterns in Jamaica reflect the flow of people and commerce'. Discuss the significance of this statement highlighting the implications for the country as the government attempts to develop a first-world transportation system.arrow_forwardThe following graph shows the identical demand for all the individuals using TV cable services. 6 Price in $ per hour 4 2 0 2 a. $8 b. $16 c. $24 d. $32 Quantity in hours per month 8 10 The producer or the provider faces the marginal cost of $1. Find the total revenue that provider earns at the profit-maximizing two-part tariff.arrow_forwardЕОC 16.04 Which of the below is NOT an example of price discrimination? Select an answer and submit. For keyboard navigation, use the up/down arrow keys to select an answer. Airlines charge a lower price for round trips than one-way trips. a b Many Universities provide financial aid to needy students. Shops provide discount coupons to the public. Gas prices are different throughout the city.arrow_forward
- Why does it not charge a price below the market price?arrow_forwardHow does price discrimination play a role in the economy?How does the idea of price discrimination apply to an industry?arrow_forwardPlease solve Fast i give 2 like The managers of Movies Plus, a large movie theater, want to practice third-degree price discrimination. The managers have learned that college students have an own price elasticity of demand of 1.5 for tickets at Movies Plus and adults have an own price elasticity of 1.2. If the managers have correctly determined the third-degree profit-maximizing price for adults is $15, what is the third-degree profit-maximizing price to charge students? Group of answer choices (1)$13.50 (2)$10.00 (3)$7.50 (4)$8.50arrow_forward
- Price discrimination is the practice of selling the same good at more than one price when the price differences are not justified by cost differences. Evaluate the following statement: "Price discrimination is possible only if no one can easily resell the good." None of these choices True, because this prevents the low-price segment of the market from reselling to the high-price segment False, because it doesn't matter whether consumers can resell the good or not False, because allowing for resale is more efficient Which of the following kinds of price discrimination occurs when each customer in a single market is charged the maximum price he or she is willing to pay? Second-degree price discrimination Third-degree price discrimination This is not an example of price discrimination Perfect price discriminationarrow_forwardWhich of the following is not an example of price discrimination? a. rental car companies charging lower prices to local residents than to out-of-state residents b. mattress sales on Memorial Day c. student discounts at museums d. children's discounts at amusement parksarrow_forwardWhich of the following is not a requirement for a successful price discrimination strategy? A. A firm must have market power B. The firm must be able to prevent consumers who buy a product at a low price from reselling it to other consumers at a high price. C. Some consumers must have greater willingness to pay for the product than other consumers, and the firm must be able to know what prices consumers are willing to pay D. The good must be a very expensive goodarrow_forward
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