Question

Question 1

Acquiring a firm that sells a substitute good would make the demand curve for your original product

	more inelastic
	more elastic
	unchanged
	None of the above

Question 2

You own two different energy drink brands: "Blue Cow" and "600 minute energy". If you reduce the price on "Blue Cow", __________________

	sales of "Blue Cow" would increase, without any changes in sales for "600 minute energy".
	sales of both "Blue Cow" and "600 minute energy" would increase.
	sales of "Blue Cow" would increase, but the sales of "600 minute energy" would be cannibalized.
	neither "Blue Cow" nor "600 minute energy" would see an increase in sales.

Question 3

The general rule to increase profits when two close substitute brands are jointly owned is to

	increase prices for both brands
	decrease prices for both brands
	increase prices on one brand, decreasing it for the other
	increase prices on one brand, keeping the prices of the second brand constant

Question

If a hot dog manufacturer acquires a bakery that primarily bakes hot dog buns, you would likely see

	higher prices for the hot dogs but lower prices for the buns
	higher prices for the buns but lower prices for the hot dogs
	higher prices for both the hot dogs and the buns
	lower prices for both the hot dogs and the buns

Question 5

Which one of the following is the most correct?

	To reduce cannibalization among products, reposition a product so that it does not directly compete with the other
	After acquiring a substitute product, raise prices on both the products
	After acquiring a complementary product, lower prices on both the products
	All of the above

Question 6

Which of the following is an example of price discrimination?

	Seniors paying a lower price for tickets at movie theatres.
	Students paying discounted rates on travel.
	Tourists paying higher prices on local attractions than locals.
	All of the above.

Question 7

The consequence of price discrimination is to:

	consummate more transactions
	extract more consumer surplus
	increase producer surplus
	All of the above

Question 8

Movie theatres offer seniors discounts because

	seniors have a more inelastic demand for movie tickets
	seniors have a more elastic demand for movie tickets
	seniors have a higher opportunity cost of their time
	Only B&C

Question 9

Many bars close to campuses have started offering cheaper beer to consumers with a student IDs. These bars are using

	direct price discrimination
	indirect price discrimination
	decreasing returns to scale
	None of the above

Question 10

For a firm to maximize total profits through price discrimination, it should

	charge a low price to high-value consumers and a high price to low-value consumers.
	charge a high price to high-value consumers and a high price to low-value consumers.
	charge a low price to high-value consumers and a low price to low-value consumers.
	charge a high price to high-value consumers and a low price to low-value consumers.

Answer 1

1):-more inealstic

Price inelastic is defined as there is a small responsiveness of quantity demanded, demand is price inelastic

2):-​ c is right option

Sales of "Blue Cow" would increase, but the sales of "600 minute energy"would be cannibalized

Survival cannibalism is defined as the situation When people will resort to eating a fellow human being under dire circumstances

Endocannibalism is defined as the Practice of eating the flesh of a human being from the same community usually after they have died.

Exocannibalism is defined as the Consumption of flesh outside ones social group for example eating ur enemy

Pathological cannibalism is defined as the Practicing cannibalism within a culture were its not accepted

3):-​Increase prices for both brands

substitute goods is defined as a close replacement for one another . (as price increase, demand increases)

examples of substitute goods

margarine and butter
turkey and chicken

4):-​Higher prices for the buns but lower prices for the hot dogs

5):- A is right option

​To reduce cannibalization among products, reposition a product so that it does not directly compete with the other

6):-D is right option

all of the above:
seniors paying a lower price for tickets at movie theatres;
students paying discounted rates on travel;
tourists paying higher prices on local attractions than locals

Price discrimination refers to the practice of charging different prices to different consumers for the same product