ECN 601 Topic 4 Problems Chapter 12- Chapter 14 Grand Canyon

Problems Chapter 12 1. Question:A top producer of tennis balls has recently started manufacturing tennis rackets, a complementary product to tennis balls. As a result, it should 2. Question:A very profitable, high-margin chain of ice cream shops has acquired its main competitor, a low-margin frozen yogurt chain. It should 3. Question:Long-run marginal cost 4. Question:Advertising that conveys an image of high product quality makes demand accompanied with a ______ . 5. Question:To go along with its new advertising campaign, a company reduced its prices. The advertising likely featured 6. Question:Which of the following is likely to be a profitable adjustment to pricing strategy? 7. Question:Cannibalization refers to 8. Question:When two firms, each producing one product, merge, the new entity should prices if the products are complements and prices if the products are substitutes. 9. Question:An airline estimates that the potential cost of underpricing is less than the potential lost profit of unfilled seats. The airline should 10. Question:Which of the following is true about advertising? 11. Question:A consumer in an electronics store expects that an inexpensive computer and an office printer should each cost about S5oo. However, the store owner is willing to sell both the computer and printer for $lloo. According to prospect theory, which of the following combinations of prices totaling $floo is likely to generate the greatest satisfaction for the consumer. Problems Chapter 14 1. fr1me05h.Ch14-1.01 Question 1 of 3: Indirect price discrimination requires 2. fr1 me05h.Ch14-1.02 Question 2 of 3: Business travelers value first-class tickets at $2,000 and coach tickets at $i,000. If coach tickets are currently priced at $400, what should be the price of the first-class ticket? 3. fr1me05h.Ch14-1.03 Question 3 of 3: A razor blade manufacturer gives away razors for free but charges a very high price for the razor blades. What must be true for this metering strategy to be profitable? 4. frlme05h.Ch14-2.01 Question 1 of 1: Which of the following can take advantage of the fact that a coffee shop's customers value each successive cup of coffee less than the previous cups. 5. fr1me05h.Ch14-3.01 Question 1 of 1: Bundling two products is likely to increase profit when 6. fr2me0Sh.Ch14.01 Question 1 of 5: A car manufacturer is considering selling a "standard" and a "deluxe" version of an automobile. The manufacturer has identified two equally sized consumer segments. Their values are given in the table below. The marginal cost of both versions is $10,000. Which is the most profitable strategy. 7. fr2me0Sh.Ch14.02 Question 2 of 5: A car manufacturer is considering selling a "standard" and a "deluxe" version of an automobile. The manufacturer has identified two equally sized consumer segments. Their values are given in the table below. The marginal cost of both versions is $10,000. Which, priced appropriately, is the most profitable strategy. 8. fr2me05h.Ch14.03 Question 3 of 5: Which of the following is true about selling a standard and a deluxe version of a product targeted to different segments of customers? 9. fr2me05h.Ch14.04 Question 4 of 5: Which of the following is an example of indirect price discrimination? 10. fr2me05h.Ch14.05 I Question 5 of 5: Half of a fast food restaurant's consumers value the Signature Sandwich at $3 and the Tater Fries at $2. The other half value the Signature Sandwich at $i and the Tater Fries at $3. Marginal costs are zero. What are the restaurant's total profits (per customer) without bundling (selling each item separately at its own price) and with bundling (selling both items together for a single price)?