Question

Recently, Quandl announced that they were purchased by NASDAQ. Both firms provide historic market data and other information about exchange transactions in equity and futures markets, so they offer substitute products. After the merger is completed, we should expect that the price of these market data products offered by the combined firm will:

	A.	remain unchanged
	B.	increase
	C.	decline
	D.	We do not have enough information to answer this question

	A.	$200
	B.	$300
	C.	$400
	D.	$600

To successfully adopt a price discrimination strategy, the seller must:

	A.	be able to prevent resale between buying groups
	B.	offer distinct products for each separate pricing group
	C.	be able to identify the willingness to pay for each individual customer
	D.	be able to know which customers belong to the different pricing groups

Which group is offered the lower price under a price discrimation scheme?

	A.	Inelastic demand group
	B.	Elastic demand group

The remaining consumer surplus is zero under a successful first-degree price discrimination scheme.

True

False

In general, women's clothing items (e.g., running shoes) have higher prices than comparable products designed for men due to price discrimination. How do the clothing sellers prevent resale in these markets?

	A.	State consumer protection laws prohibit selling goods intended for one group to members of the other group
	B.	The retailers are prohibited from selling products intended for one group to members of the other group
	C.	The clothing products are differentiated by styling or design features
	D.	Price discrimination is not possible in clothing markets

Which of the following claims is NOT true?

	A.	Bundling is profitable if the willingness to pay for the bundle is more homogeneous than the willingness to pay for the bundle components
	B.	Price discrimination is feasible if the costs of arbitrage exceed the difference in prices charged to the different customers
	C.	Volume discounts are not a form of price discrimination
	D.	If arbitrage between customers is possible, the seller should offer uniform prices

Answer 1

1- After the merger is completed, we should expect that the price of these market data products offered by the combined firm will:

B. increase

As after merger the competition between the firms has been removed and also now there is no substitute available

2- To successfully adopt a price discrimination strategy, the seller must:

D. be able to know which customers belong to the different pricing groups

So that seller can charge prices according to their price group.

3- Which group is offered the lower price under a price discrimination scheme:

B. elastic demand group

4- The remaining consumer surplus is zero under a successful first-degree price discrimination scheme

True

Consumer surplus is the difference between what consumer is willing to pay and the market price of a good and in 1^st degree of price discrimination sellers charges price equal to the willingness of pay of the consumer so there is no surplus left for consumer

5- How do the clothing sellers prevent resale in these markets?

C. The clothing products are differentiated by styling or design features

6- The following is not true :

C. Volume discounts are not a form of price discrimination

Giving discounts to the customers is a second form of price discrimination