UNC MBA 650 FINAL EXAM QUESTIONS AND CORRECT ANSWERS
By focusing the customers on the price of a product, you make:
a. the demand for the product more inelastic
b. the customers less price sensitive to the product
c. the demand for the product more elastic
d. only B&C
c. the demand for the product more elastic
large amusement parks charge entrance fees rather than fee per ride because:
a. customers are more sensitive to paying a fee per ride
b. customers are less sensitive to paying a fee per ride
c. customers view paying per ride as a smaller cost
d. none of the above
a. customers are more sensitive to paying a fee per ride
A local restaurant increases the prices on its burgers as soon as it begins a promotional campaign.
Which of the following is likely to be true?
a. the promotional campaign featured how much better their burgers are
b. the promotional campaign focused on the value per dollar
c. the promotional campaign made demand more elastic
d. all of the above
a. the promotional campaign featured how much better their burgers are
The Robinson-Patman Act
a. is a part of the antitrust laws
b. makes it illegal to give a price discount on a good sold to another business
c. is also known as the Anti-Chain-Store Act
d. all of the above
d. all of the above
Which of the following is FALSE about indirect price discrimination
a. the firm is able to identify each customer's willingness to pay
b. the firm is able to charge different prices to the different value customers
c. the firm is able to prevent arbitrage
d. all of the above
a. the firm is able to identify each customer's willingness to pay
When a grocery store offers discount coupons in Sunday papers, it is trying to
a. price discriminate
b. undercut its competition
,c. reward the frequent readers
d. provide a social service
a. price discriminate
Which of the following is an example of the "damaged goods" strategy
a. a doll company selling dolls at cost but charging high margins on dol accessories
b. a cell phone company offers free locked in phones but charges high prices per call
c. a catering company pays its chefs higher wages to make sure that the bargain meals are just
slightly burnt
d. none of the above
c. a catering company pays its chefs higher wages to make sure that the bargain meals are just
slightly burnt
for direct price discrimination to work
a. the firm must be able to identify the members of the low value group
b. the firm must charge a single price to all its customers
c. the firm need not worry about any arbitrage since all its customers are charged the same price
d. the firm should charge a higher price to those customers with the most elastic demand
a. the firm must be able to identify the members of the low value group
which of the following is FASE?
a. to reduce cannibalization among products, make the products more homogenous
b. after acquiring a substitute product, raise prices on both the products
c. after acquiring a complementary product, lower prices on both the products
d. all of the above
a. to reduce cannibalization among products, make the products more homogenous
Firms can practice indirect price discrimination by
a. Offering volume discounts
b. Using two-part pricing
c. Offering a bundle containing a number of units
d. All of the above
d. all of the above
for direct price discrimination to work, the firm
a. must be able to identify members of the low value group
b. charge the low value group lower prices than the rest
c. prevent the low value group from reselling their low-priced goods to higher valued group
d. all of the above
d. all of the above
,for a retailer buying from a wholesaler, volume discounts do not violate the Robinson-Patman act
because
a. to sell larger volumes, the retailer himself has to offer discounts
b. to sell larger volumes, the retailer has to incur costs in promoting the item
c. to sell larger volumes, the retailer has to hold the items in inventory longer
d. all of the above
d. all of the above
firm X owns both a grocery store and the parking lot outside the grocery store. In order to
increase the traffic at the store it must
a. decrease the prices on the goods sold in the store
b. decrease the parking rates
c. all of the above
d. none of the above
c. all of the above
When deciding what price to charge customers, a firm may choose to charge different prices
based on the customers'
a. age
b. willingness to pay
c. location
d. all of the above
d. all of the above
Carving knives
Home users
Professional Chefs
No-name brand
$40
$70
High-end professional series
$60
$130
How much would the firm make in revenue if it prices both its products successfully?
a. $110
b. $120
c. $130
d. $14
d. $140
, The general rule to increase profits when two close substitute brands are jointly owned is
a. increase prices for both brands
b. decrease prices for both brands
c. increase prices on one brand, decreasing it for the other
d. increase prices on one brand, keeping the prices of the second brand constant
a. increase prices for both brands
For direct price discrimination to work effectively
a. the low valued customers should not be able to engage in arbitrage
b. you need to charge the same price to the different groups
c. both groups should have the same elasticity of demand
d. none of the above
a. the low valued customers should not be able to engage in arbitrage
You are the owner of an art supply store, selling both paint and paintbrushes. In order to
maximize total sales, you should
a. decrease the price of the paint only
b. decrease the price on paintbrushes only
c. decrease the price on both the paint and the paintbrushes
d. increase the price on both the paint and the paintbrushes
c. decrease the price on both the paint and the paintbrushes
Cooking Wok
Value to home users
Value to professional Chefs
No-name brand
$50
$60
High-end professional series
$70
$100
Given that the firm offers both the products, what prices can it offer to motivate the two groups
to profitably self-sort into buying the correct brand
a. No-name $60; High-end $100
b. No-name $50; High-end $100
c. No-name $50; High-end $90
d. No-name $60; High-end $90
c. No-name $50; High-end $90
By focusing the customers on the price of a product, you make:
a. the demand for the product more inelastic
b. the customers less price sensitive to the product
c. the demand for the product more elastic
d. only B&C
c. the demand for the product more elastic
large amusement parks charge entrance fees rather than fee per ride because:
a. customers are more sensitive to paying a fee per ride
b. customers are less sensitive to paying a fee per ride
c. customers view paying per ride as a smaller cost
d. none of the above
a. customers are more sensitive to paying a fee per ride
A local restaurant increases the prices on its burgers as soon as it begins a promotional campaign.
Which of the following is likely to be true?
a. the promotional campaign featured how much better their burgers are
b. the promotional campaign focused on the value per dollar
c. the promotional campaign made demand more elastic
d. all of the above
a. the promotional campaign featured how much better their burgers are
The Robinson-Patman Act
a. is a part of the antitrust laws
b. makes it illegal to give a price discount on a good sold to another business
c. is also known as the Anti-Chain-Store Act
d. all of the above
d. all of the above
Which of the following is FALSE about indirect price discrimination
a. the firm is able to identify each customer's willingness to pay
b. the firm is able to charge different prices to the different value customers
c. the firm is able to prevent arbitrage
d. all of the above
a. the firm is able to identify each customer's willingness to pay
When a grocery store offers discount coupons in Sunday papers, it is trying to
a. price discriminate
b. undercut its competition
,c. reward the frequent readers
d. provide a social service
a. price discriminate
Which of the following is an example of the "damaged goods" strategy
a. a doll company selling dolls at cost but charging high margins on dol accessories
b. a cell phone company offers free locked in phones but charges high prices per call
c. a catering company pays its chefs higher wages to make sure that the bargain meals are just
slightly burnt
d. none of the above
c. a catering company pays its chefs higher wages to make sure that the bargain meals are just
slightly burnt
for direct price discrimination to work
a. the firm must be able to identify the members of the low value group
b. the firm must charge a single price to all its customers
c. the firm need not worry about any arbitrage since all its customers are charged the same price
d. the firm should charge a higher price to those customers with the most elastic demand
a. the firm must be able to identify the members of the low value group
which of the following is FASE?
a. to reduce cannibalization among products, make the products more homogenous
b. after acquiring a substitute product, raise prices on both the products
c. after acquiring a complementary product, lower prices on both the products
d. all of the above
a. to reduce cannibalization among products, make the products more homogenous
Firms can practice indirect price discrimination by
a. Offering volume discounts
b. Using two-part pricing
c. Offering a bundle containing a number of units
d. All of the above
d. all of the above
for direct price discrimination to work, the firm
a. must be able to identify members of the low value group
b. charge the low value group lower prices than the rest
c. prevent the low value group from reselling their low-priced goods to higher valued group
d. all of the above
d. all of the above
,for a retailer buying from a wholesaler, volume discounts do not violate the Robinson-Patman act
because
a. to sell larger volumes, the retailer himself has to offer discounts
b. to sell larger volumes, the retailer has to incur costs in promoting the item
c. to sell larger volumes, the retailer has to hold the items in inventory longer
d. all of the above
d. all of the above
firm X owns both a grocery store and the parking lot outside the grocery store. In order to
increase the traffic at the store it must
a. decrease the prices on the goods sold in the store
b. decrease the parking rates
c. all of the above
d. none of the above
c. all of the above
When deciding what price to charge customers, a firm may choose to charge different prices
based on the customers'
a. age
b. willingness to pay
c. location
d. all of the above
d. all of the above
Carving knives
Home users
Professional Chefs
No-name brand
$40
$70
High-end professional series
$60
$130
How much would the firm make in revenue if it prices both its products successfully?
a. $110
b. $120
c. $130
d. $14
d. $140
, The general rule to increase profits when two close substitute brands are jointly owned is
a. increase prices for both brands
b. decrease prices for both brands
c. increase prices on one brand, decreasing it for the other
d. increase prices on one brand, keeping the prices of the second brand constant
a. increase prices for both brands
For direct price discrimination to work effectively
a. the low valued customers should not be able to engage in arbitrage
b. you need to charge the same price to the different groups
c. both groups should have the same elasticity of demand
d. none of the above
a. the low valued customers should not be able to engage in arbitrage
You are the owner of an art supply store, selling both paint and paintbrushes. In order to
maximize total sales, you should
a. decrease the price of the paint only
b. decrease the price on paintbrushes only
c. decrease the price on both the paint and the paintbrushes
d. increase the price on both the paint and the paintbrushes
c. decrease the price on both the paint and the paintbrushes
Cooking Wok
Value to home users
Value to professional Chefs
No-name brand
$50
$60
High-end professional series
$70
$100
Given that the firm offers both the products, what prices can it offer to motivate the two groups
to profitably self-sort into buying the correct brand
a. No-name $60; High-end $100
b. No-name $50; High-end $100
c. No-name $50; High-end $90
d. No-name $60; High-end $90
c. No-name $50; High-end $90
