When a firm requires a customer to buy additional products in order to buy one of its products, this is known as a(n): maximizing device. O bundling contract. two-part tariff. O oligopolistic device. O price differentiation.
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- Parkleigh Pharmacy is an upscale department store in Rochester, NY, that sells personal accessories and home decorations. Kaufmann’s is a departmental store based in Pennsylvania and has several stores in Rochester, NY. Kaufmann carries a broad range of products and caters to middle-class customers. A salesperson at Parkleigh is paid a straight hourly wage (e.g., no sales commission) and 30% discount from purchasing any product from Parkleigh’s store. A salesperson at Kaufmann gets an hourly wage lower than Parkleigh’s hourly wage but gets 5% commission on sales. However, the product salesperson buys from Kaufmann without a discount. Explain why does Kaufmann pays sales commission, and Parkleigh doesn’tCASE STUDY #3 - HEADQUARTERED IN McLEAN, VIRGINIA. HILLTON WORLDWIDE (AND MARRIOT) ON JANUARY 1, 2015, IMPLEMENTED A NEW POLICY THAT REQUIRES CUSTOMERS TO NOTIFY THE HOTEL THE DAY BEFORE THEIR ACTUAL SCHEDULED ARRIVAL TO AVOID HAVING TO PAY FOR THE ROOM. THE POLICY REVERSES A LONG TRADITION OF ALLOWING CUSTOMERS TO CANCEL THEIR RESERVATION “UP TO 6PM THE DAY OF ARRIVAL WITHOUT PENALTY.HOTEL DEMAND IN 2014-2015 HAS EXCEEDED SUPPLY IN MANY CITIES, GIVING HOTELIERS THE UPPER HAND. ANOTHER MOTIVATION FOR THE NEW POLICY IS THAT HOTELIERS DESIRE TO STIFLE THE USE OF APPS SUCH AS YAPTA THAT TRACK HOTEL PRICES AND, WHENEVER A RATE DIPS. APPARENTLY A GROWING NUMBER OF TRAVELERS REBOOK AT A LOWER RATE AND CANCEL THE COSTLIER RESERVATION, LITERALLY RIGHT-UP UNTIL CHECK-IN TIME.PENNY-PINCHING TRAVELERS ARE INCREASINGLY USING SUCH TOOLS, AND HILTON IS SEEKING TO STIFLE THIS PRACTICE.BIG RIVALS TO HILTON (AND MARRIOTT) ARE STAYING THE COURSE, HOWEVER, WITH TRAVELLER-FRIENDLY CANCELLATION POLICIES…Hardware, a small family-owned store in Middletown, sells a 100-pack of garnet sandpaper for $35. The Home Shoppe, a large retail hardware chain in neighboring Morristown, sells the same product for $29. Based on this scenario, what would you expect Merv immediate response to be? Merv will remove his advertisements and rely on word of mouth. Merv will reduce his price to respond to the price competition from the HomeShoppe. The HomeShoppe will initiate non-price competition with Merv. The HomeShoppe will raise its price to respond to the price competition from Merv.
- Price discrimination leads to higher price for all consumer . True or falseAirline is a monopolistically competitive market with different name brands such as United Airline, JetBlue, Virgin Airline, etc. A law that restricts the ability of airlines to advertise on billboards in Las Vegas, a resort destination, would likely lead to increased price competition among airline business in Las Vegas. reduced efficiency of Las Vegas airline markets. consumers requesting an increase in the number of billboards in Las Vegas. no change in profits for all airline businesses in Las Vegas.Which of the following statements is true about the history of Southwest Airlines entering new markets? Multiple Choice Southwest’s entry caused the demand for each carrier to become more inelastic as customers increased their loyalty to particular airlines. Southwest’s entry into new markets had little impact on either the markets or airlines already serving those markets. Southwest’s low price strategy tapped into existing elastic demand in the market, increasing the airline’s revenue. Southwest’s highly inelastic supply made it difficult for them to take advantage of demand in the market.
- Which of the following conditions is most likely essential for implementing a successful market- skimming pricing strategy for a product? Lower-priced alternatives can enter the rearket easily. The product's price matches its manufacturing costs. Low prices promote more market growth than high prices. A low-price position of the product is maintained. The product's quality and image must support its high price.You are the manager of a monopolistically competitive firm, and your demand and cost functions are estimated as Q = 48 − 2P and C(Q) = 6 + 3Q + Q2. a. Find the inverse demand function for your firm’s product. P = − Q b. Determine the profit-maximizing price and level of production. Instructions: Round your response to the nearest penny (two decimal places). Price: $ Instructions: Round your response to one decimal place. Quantity: c. Calculate your firm’s maximum profits. Instructions: Round your response to the nearest penny (two decimal places). $ d. What long-run adjustments should you expect? Explain. multiple choice Entry will occur until profits are zero. Exit will occur until profits rise sufficiently high. Neither entry nor exit will occur.Everyday-low pricing is a pricing strategy that is consistent with a goal of achieving long-term profitability through volume. ( ) a) True () b) False
- A supply curve that is parallel to the horizontal axis suggests that: the industry is organized monopolistically. the relationship between price and quantity supplied is inverse. a change in demand will change price in the same direction. a change in demand will change the equilibrium quantity but not price.Airline is a monopolistically competitive market with different name brands such as United Airline, JetBlue, Virgin Airline, etc. A law that restricts the ability of airlines to advertise on billboards in Las Vegas, a resort destination, would likely lead to no change in profits for all airline businesses in Las Vegas. increased price competition among airline business in Las Vegas. reduced efficiency of Las Vegas airline markets. consumers requesting an increase in the number of billboards in Las Vegas. O O OYou are the manager of a monopolistically competitive firm, and your demand and cost functions are estimated as Q = 36 − 4P and C(Q) = 4 + 4Q + Q2. a. Find the inverse demand function for your firm’s product. P =____ −_____ Q b. Determine the profit-maximizing price and level of production. Instruction: Price should be rounded to the nearest penny (two decimal places). Price: $_____ Quantity:_____ c. Calculate your firm’s maximum profits. Instruction: Your response should appear to the nearest penny (two decimal places). $______ d. What long-run adjustments should you expect? Explain. multiple choice A. Entry will occur until profits are zero. B. Neither entry nor exit will occur. C. Exit will occur until profits rise sufficiently high.