Question

86

High-end stores like Nordstrom’s and Dillard’s charge higher prices versus stores like J.C. Penny, Sears and Macy’s. The more expensive stores often try to offer better customer service and they encourage their sales people to start conversations with customers to find out what they would like.

What kind of microeconomic strategy is this?

Multiple Choice

• An elastic demand curve counter-strategy

• . None of the above

• A non-price strategy

• A cost reduction strategy

87

At the equilibrium point of the demand and supply curves, most buyers and sellers will be satisfied with the prices and quantities being offered.       

True or False

88

A monopoly creates a situation whereby society must suffer and pay higher prices for less output versus the lower prices and higher output we would have if we had a free market. This situation of loss is known as what?

Multiple Choice

• Inefficiency Loss

• All of the statements are false

• Welfare Loss to Society

• Total Product Loss

89

Net Profit means the exact same thing as Economic Profit.    

True or False

90

A negative externality is something outside the free market system. Which item or items below represent a negative externality?

Multiple Choice

• When the state government gives grant money to a city to build a new bridge

• A 9.8 earthquake that destroys a city

• The K-12 school system inside a city

• When the government opens up a new and beautiful city park

Answer 1

86. A non-price strategy.

Because offering better customer service and conversations with customers to find out what they would like, is the non price strategy where the firm is trying to distinguish their products and services for its rivals, without considering price, to encourage their sales.

87. True.

Price equilibrium point is generally generated from the forces of market demand and market supply. Where demand is equal to supply at single price point. Hence buyer and seller both would be satisfied with this price.

88. Total Product Loss

Because in free market at lower price higher number of goods can be consumed, while monopolist Charing higher price would reduce demand for the product and this ultimately reduce the number of goods which could be produced and consumed in open market. Therefore results in total product loss.

89. True.

Net profit is equivalent to economic profit as both has coverage of opportunity cost. While Accounting profit is equivalent to gross profit.