Question 1 question text the following shows the demands and

Question 1

 

Question text


The following shows the demands and marginal revenue in two markets,
 1 and 2, for a price discriminating firm along with total marginal revenue, MRT, and marginal cost MC:

 

Compare the demand conditions in each market; i.e. how do the two markets differ in their demand for the firm’s product?

Select one:

a. Market 1 has less demand than market 2. 1 is low demanders, 2 is high demanders.

 

b. Market 1 has more demand than market 2. 1 is high demanders, 2 is low demanders.

 

c. Both markets have equivalent demand since MC is constant in both markets.

 

Question 2

 

Question text

How much total output should the firm produce (for both markets combined)? (It would be easiest to copy and paste the picture above and draw directly on the picture using Insert, Shapes to do the next few questions.)

Select one:

a. 250 units

 

b. 225 units

 

c. 425 units

 

d. 75 units

 

Question 3

 

Question text

How should that output be allocated between markets 1 and 2?

Select one:

a. 225 units in market 1; 250 units in market 2

 

b. 150 units in market 1; ≈310 units in market 2

 

c. 125 units in market 1; ≈180 units in market 2

 

d. 75 units in market 1; 150 units in market 2

 

Question 4

 

Question text

What price should the firm charge in each market?

Select one:

a. $20 in both markets

 

b. ≈$27.50 in market 1; $35 in market 2

 

c. ≈$22.50 in market 1; ≈$32 in market 2

 

d. ≈$27.50 in both markets

 

 

 

Question 5

 

Question text

On Amazon.com, there are three versions of Keynes’ famous General Theory: a hardcover for $19.79, paperback for $8.82, and a Kindle version for $2.99. There is not much difference in the cost of production between hardcover and paperback books (though there likely is for the Kindle e-book version), but hardcover books do tend to be published earlier than paperback versions of the same book. How do you explain the wide variety of prices for basically the same book?

Select one:

a. Price discrimination between demanders. Kindle owners are high demanders since the format is not compatible with anything but Kindles. Hardcover buyers are low demanders since there aren’t many who would want a hardcover when paperbacks or e-books are cheaper. There are more paperback buyers, so they pay a price between these two extremes.
b. Even though the cost of production between hardcover and paperback is small, demand is highly elastic, so this small cost difference results in a large price difference. The cost difference between paperback and e-books is larger, resulting in the smaller gap between paperback and e-book prices.
c. The market for hardcover books has more demand and less supply than the market for paperbacks, which likewise has more demand and less supply than the market for e-books. The equilibrium prices all reflect these differences.
d. Price discrimination between demanders. High demanders are willing to pay a high price for a hardcover that is published early. Low demanders aren’t, and are only willing to pay low price for later paperback. It is much cheaper to produce the Kindle version (MC probably close to zero), and not many buyers (people with Kindles, less D) lead to lowest price.

 

 

 

Place your order
(550 words)

Approximate price: $22

Calculate the price of your order

550 words
We'll send you the first draft for approval by September 11, 2018 at 10:52 AM
Total price:
$26
The price is based on these factors:
Academic level
Number of pages
Urgency
Basic features
  • Free title page and bibliography
  • Unlimited revisions
  • Plagiarism-free guarantee
  • Money-back guarantee
  • 24/7 support
On-demand options
  • Writer’s samples
  • Part-by-part delivery
  • Overnight delivery
  • Copies of used sources
  • Expert Proofreading
Paper format
  • 275 words per page
  • 12 pt Arial/Times New Roman
  • Double line spacing
  • Any citation style (APA, MLA, Chicago/Turabian, Harvard)

Our guarantees

Delivering a high-quality product at a reasonable price is not enough anymore.
That’s why we have developed 5 beneficial guarantees that will make your experience with our service enjoyable, easy, and safe.

Money-back guarantee

You have to be 100% sure of the quality of your product to give a money-back guarantee. This describes us perfectly. Make sure that this guarantee is totally transparent.

Read more

Zero-plagiarism guarantee

Each paper is composed from scratch, according to your instructions. It is then checked by our plagiarism-detection software. There is no gap where plagiarism could squeeze in.

Read more

Free-revision policy

Thanks to our free revisions, there is no way for you to be unsatisfied. We will work on your paper until you are completely happy with the result.

Read more

Privacy policy

Your email is safe, as we store it according to international data protection rules. Your bank details are secure, as we use only reliable payment systems.

Read more

Fair-cooperation guarantee

By sending us your money, you buy the service we provide. Check out our terms and conditions if you prefer business talks to be laid out in official language.

Read more