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Chapters 13-23 Managerial Economics Study Guide Week 5 price discrimination is the practice of charging different prices to different buyers or groups of buyers based on differences in demand. Charging lower prices to low-value consumers also means that you charge high-value customers higher prices, making the practice controversial. Under direct price discrimination , we can identify members of the low-value group, charge them a lower price, and prevent them from reselling their lower-p...

1 . Individual Problems 4-1 Which of the following is an example of an extent decision? Children in poor neighborhoods often have bleak outlooks on life and see little gain from studying. In a recent experiment, children in poor neighborhoods were paid $100 for each A they earned during a six- week grade reporting cycle. 2Suppose a participant in this experiment was expending $0 worth of effort in studying for each class before the experiment. Over the next 6 weeks, the student has a math clas...

Ecn501 Week 1 2. Individual Problems 1-2 The owners of a small manufacturing concern have hired a vice president to run the company with the expectation that he will buy the company after five years. Compensation of the new vice president is a flat salary plus 75% of the first $150,000 profit, then 10% of profit over $150,000. The goal of the owners of the firm is to maximize profits. True or False: This contract does not align the incentives of the new vice president with the profitabil...

1. All of these are characteristics of a competitive industry, except: a. Many substitutes b. No barriers to entry c. Homogenous product d. Little or no information on rivals’ products ANSWER: d TOPICS: Section 1: Competitive Industries 2. Which of the following markets are closest to perfectly competitive a. The market for smart phones b. The market for generic pharmaceuticals c. The market for sport shoes d. The market for fast food ANSWER: ...

The owners of a small manufacturing concern have hired a vice president to run the company with the expectation that she will buy the company after five years. For the first $150,000 of profit, the vice president's compensation is a flat annual salary of $50,000 plus 60% of company profits. Beyond the first $150,000 in profits, the vice president's compensation is the salary she receives at $150,000 profit plus 10% of company profits in excess of $150,000. On the following graph, use the purp...

CH 14 Indirect price discrimination requires identifying some potential product feature that is correlated with value Business travellers value first-class tickets at $2,000 and coach tickets at $1,000. If coach tickets are currently priced at $400, what should be the price of the first-class ticket? $1,399 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? Higher value consum...

This study source was downloaded by 100000832882090 from CourseHero.com on 04-09-2024 16:37:40 GMT -05:00 https://www.coursehero.com/file/71511115/Assignment-1pdf/ Powered by TCPDF (www.tcpdf.org) Points: 1 / 1 Close Explanation 1. Individual Problems 2-1 Suppose the government is considering penalizing airlines $27,500 per passenger each time passengers are made to rema...

This study source was downloaded by 100000832882090 from CourseHero.com on 04-11-2024 01:13:11 GMT -05:00 https://www.coursehero.com/file/227648221/ME-week5docx/ 1. Every year, management and labor renegotiate a new employment contract by sending their proposals to an arbitrator who chooses the best proposal (effectively giving one side or the other $2 million). Each side can choose to hire, or not hire, an expensive labor lawyer (at a cost of $400,000) who is effective at preparing the propo...

This study source was downloaded by 100000795595607 from CourseHero.com on 04-08-2024 03:58:59 GMT -05:00 https://www.coursehero.com/file/164526806/Econ-Quiz-56docx/ a. 21 Average revenue b. 8 Marginal revenue c. Both a and b d. 9 None of the above c. Both a and b 10 In equilibrium the typical investor __________ c. is indifferent between buying low and high risk assets 334 Profits of a monopoly are driven to zero a. In the long run because the assets eventually move from low to high valued...

The board of directors is deciding who the new CEO should be for a company. It has narrowed the candidates down to two highly credentialed individuals. Steve is known to be harsh but fair. He is a proven CEO and has driven companies to success quickly. Kim, the other candidate, is known to be a "people person" with a high emotional intelligence. In the past she has demonstrated success building company culture to achieve great results. Knowing this, which candidate should the company choose...