EBK PRINCIPLES OF MICROECONOMICS (SECON
2nd Edition
ISBN: 9780393616149
Author: Mateer
Publisher: W.W.NORTON+CO. (CC)
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Chapter 11, Problem 4SP
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EBK PRINCIPLES OF MICROECONOMICS (SECON
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- a) Why does TRUVADA cost $1,780 in the United States whereas it's just $8 in Australia?b) Can you provide other examples of price discrimination?arrow_forwardA firm practices third-degree price discrimination. With the aid of a graphical illustration, explain the firm’s pricing strategy to maximise profits.arrow_forwardYou are a pricing manager at a generic pharmaceutical distributor. The CEO of the company calls a meeting of all the managers and states that it is critical to increase revenue soon or you may have to start laying off employees. You know that the price elasticity of demand for your leading generic drug is 1.5 and you sell it for three times what it costs. As the pricing manager, you shouldarrow_forward
- Q3) How is peak-load pricing a form of price discrimination? Can it make consumers better off? Give anexample.arrow_forwardAmazon Discrimination In September 2000, Amazon offered a Planet of the Apes DVD to customers using a Netscape Web browser for $64.99. Several seconds later, however, a similar search performed with Microsoft’s Internet Explorer browser resulted in a price of $74.99 for the same product. Why? Price Discrimination Describe a price discrimination opportunity your company faces—direct, indirect, or bundling. Tell your company how best to implement the scheme, and compute the profit consequences of implementing the scheme.arrow_forwardSuppose that Jawa Timur Park offers a discount on admission to residents of Batu. What kind of price discrimination is this? What does this imply about the elasticity of demand for Jawa Timur Park attractions by Batu?arrow_forward
- Suppose you were asked to manage a golf course that was currently charging a uniform price. Would you suggest that the course continue with this price plan or switch to a two-part pricing plan? Explain your decision and how you would choose the optimal price.arrow_forwardDemand for Corn Flakes is: P = 24- Q. Supply of Kellogg's Corn Flakes is: P = 2+ Q. Now a generic company enters the market, selling geneen Corn Flakes for $7. Assume consumers are indifferent between generic and Kellogg's Cororlakes. How many boxes of Kellogg's (brand) Corn Flakes will sell? Enter as a value.arrow_forwardCASE STUDY #3 - HEADQUARTERED IN McLEAN, VIRGINIA. HILLTON WORLDWIDE (AND MARRIOT) ON JANUARY 1, 2015, IMPLEMENTED A NEW POLICY THAT REQUIRES CUSTOMERS TO NOTIFY THE HOTEL THE DAY BEFORE THEIR ACTUAL SCHEDULED ARRIVAL TO AVOID HAVING TO PAY FOR THE ROOM. THE POLICY REVERSES A LONG TRADITION OF ALLOWING CUSTOMERS TO CANCEL THEIR RESERVATION “UP TO 6PM THE DAY OF ARRIVAL WITHOUT PENALTY.HOTEL DEMAND IN 2014-2015 HAS EXCEEDED SUPPLY IN MANY CITIES, GIVING HOTELIERS THE UPPER HAND. ANOTHER MOTIVATION FOR THE NEW POLICY IS THAT HOTELIERS DESIRE TO STIFLE THE USE OF APPS SUCH AS YAPTA THAT TRACK HOTEL PRICES AND, WHENEVER A RATE DIPS. APPARENTLY A GROWING NUMBER OF TRAVELERS REBOOK AT A LOWER RATE AND CANCEL THE COSTLIER RESERVATION, LITERALLY RIGHT-UP UNTIL CHECK-IN TIME.PENNY-PINCHING TRAVELERS ARE INCREASINGLY USING SUCH TOOLS, AND HILTON IS SEEKING TO STIFLE THIS PRACTICE.BIG RIVALS TO HILTON (AND MARRIOTT) ARE STAYING THE COURSE, HOWEVER, WITH TRAVELLER-FRIENDLY CANCELLATION POLICIES…arrow_forward
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