Chapter 7 Monopoly and Price Discrimination

 29) What is themost likely reason that snack foods sold in vending machines is so much more expensive than the snack foods sold in grocery stores?

A) Snack foods sold in vending machines come in smaller packages, so the per-package costs are higher.

B) Grocery stores buy in bulk, while vending machine companies tend to buy in smaller quantities.

C) People who purchase snack foods from vending machines tend to have less elastic demand for snack foods.

D) Owners of vending machine companies are greedier than owners of grocery stores.

30) What is the most likely reason that milk sold in convenience stores is more expensive than milk sold in grocery stores?

A) Convenience stores sell milk in smaller packages, so the per-gallon packaging costs are higher.

B) Grocery stores buy in bulk, while convenience stores buy milk in smaller quantities.

C) People who buy milk at convenience stores tend to have less elastic demand for milk.

D) Convenience store owners are greedier than grocery store owners.

31) You currently sell the same product to both students and faculty members, and are able to prevent transfer from one group to the other. Your current prices, quantities sold, and the absolute values of the slopes of the demand curves are as follows

If your marginal cost is $1 and you are interested in maximizing your revenues, how would you adjust your prices?

A) Increase prices for both groups.

B) Decrease prices for both groups.

C) Increase student price and decrease faculty price.

D) Decrease student price and increase faculty price.

32) You currently sell the same product to both professional plumbers and homeowners, and are able to prevent transfer from one group to the other. Your current prices, quantities sold, and the absolute values of the slopes of the demand curves are as follows

If your marginal cost is $10 and you are interested in maximizing your revenues, how would you adjust your prices?

A) Increase plumbers' price and decrease homeowners' price.

B) Decrease plumbers' price and increase homeowners' price.

C) Increase prices for both groups.

D) Decrease prices for both groups.

Table 7.2

33) Table 7.2 contains price, demand, and cost data for the Capri Theater, the only first-run movie theater in a small town. What is its revenue from students under the single price policy?

A) $150

B) $180

C) $450

D) $540

34) Table 7.2 contains price, demand and cost data for the Capri Theater, the only first-run movie theater in a small town. What is its profit from students under the single price policy?

A) $150

B) $180

C) $450

D) $540

35) Table 7.2 contains price, demand, and cost data for the Capri Theater, the only first-run movie theater in a small town. What is its revenue from non-students under the single price policy?

A) $300

B) $360

C) $450

D) $540

36) Table 7.2 contains price, demand, and cost data for the Capri Theater, the only first-run movie theater in a small town. What is its profit from non-students under the single price policy?

A) $300

B) $360

C) $450

D) $540

37) Table 7.2 contains price, demand, and cost data for the Capri Theater, the only first-run movie theater in a small town. What is its total profit under the single price policy?

A) $300

B) $360

C) $450

D) $540

38) Table 7.2 contains price, demand, and cost data for the Capri Theater, the only first-run movie theater in a small town. What is its profit from students under the student discount policy?

A) $200

B) $250

C) $325

D) $375