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Which of the following correctly illustrates how prices serve as signals to consumers?
 
a. A high price signals to consumers that they should buy a good.

b. A low price signals to consumers that the good is not well-made.

c. A high price signals to consumers that the good is well-made.

d. A low price signals to consumers that they should buy a good.

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Alice Sejake
Alice SejakeLv10
10 Oct 2020

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Related questions

A monopolist firm serves 6 consumers. Each of the consumers only buy one unit of the good. Two consumers buy one unit if the price is lower or equal than $100 and the other four consumers buy one unit if the price is lower or equal than $10. The firm's cost function is C(Q) = 5Q.

(a) Suppose the firm is restricted to set a single price for all consumers (i.e., no price discrimination). What price does the firm set? How much profit does the firm collect?

(b) How much consumer surplus is generated at the prices identified in (a)?

(c) Suppose the firm is able to set a personalized price for each consumer (i.e., first-degree price discrimination). What prices does the firm set? How much profit does the firm collect?

(d) How much consumer surplus is generated at the prices identified in (c)?

Which of the following is true of price discrimination as a part of international pricing strategy?

A. The more competitors there are, the lesser consumers bargaining power will be

B. The more competitors there are, the less likely consumers will be to buy from the firm that

C. A firm may charge a higher price for its product in a country where competition is limited than

D. Many competitors cause low elasticity of demand.

E. If a firm raises its prices above those of its competitors, consumers will refuse to switch to the

Question 1

The amount of profit that can be achieved using uniform pricing is __________ the profit that can be achieved from price discrimination because of _______.

Select one:

a. greater than; the cost of trying to determine every single consumer's individual demand (willingness to pay) is prohibitively expensive.

b. less than; uniform pricing is more costly so the ATC and AVC curves are higher than they are under price discrimination.

c. equal to; the TR and TC curves are equivalent under either pricing scheme, so there is no profit advantage to either scheme.

d. less than; total demand includes people who would be willing to pay more than, as well as less than, the uniform market price.

Question 2

A firm selling in two markets is practicing price discrimination:

Select one:

a. when it refuses to sell the good to some group of consumers.

b. anytime it charges different consumers different prices.

c. when it charges the same price to different consumers as long as they differ in their demand for the good.

d. when it is charging different consumers, different prices, and the price difference is not based upon cost differences.

Question 3

To successfully practice price discrimination:

Select one:

a. consumers in two separate markets must have identical demand.

b. the firm must possess market power.

c. it must be easy for consumers in one market to sell to consumers in the other market.

d. the firm must be a pure monopoly.

Question 4

If it could practice first-degree price discrimination, a firm with market power could earn:

Select one:

a. its typical monopoly profit as well as the area which, under uniform pricing, would represent the deadweight loss associated with market power.

b. an area half the size of its monopoly power under uniform pricing.

c. its typical monopoly profit as well as the area which, under uniform pricing, would represent consumer surplus.

d. its typical monopoly profit as well as the area which, under uniform pricing, would represent consumer surplus and the deadweight loss associated with market power.

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