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Question1Price discrimination is defined as:Select one:A. selling a product at the same price to each and every consumerB. selling a product at more than one priceC. selling a product at its marginal cost plus a markupD. selling more than one version of a productE. producing goods and services for sale within the firmQuestion2A firm with production located in a poor Georgia town sells toys locally for$10 each and ships the same toys to sell in a wealthy North Carolina townfor $15 each. They are not price discriminating if:Select one:A. laws in Georgia allow itB. laws in North Carolina allow itC. total advertising costs are $5 per unitD. total transportation costs are $5 per unitE. consumers in North Carolina would pay more than $15 for the toysQuestion3If a firm supplies separable markets with price elasticities h1 = -3 and h2 =-2, it should set prices P1 and P2 so that:Select one:A. P1 = P2B. 3P1 = 2P2C. 2P1 = 3P2D. 2/3P1 = 1/2P2E. 2P1 = 2/3P2Question4Cereal manufacturers’ use of coupons can be partially explained by:Select one:A. first-degree price discriminationB. second-degree price discriminationC. third-degree price discriminationD. markup pricingE. tyingQuestion5Crusty Cakes sells donuts in Eastown and Westown. Its total costs aregiven by TC = 10(QE + QW). The demand in each neighborhood is given byQE = 100 – 2PE and QW = 100 – PW. If Crusty price discriminates between thetwo neighborhoods, how much are its maximized profits?Select one:A. $850B. $1,200C. $2,475D. $2,825E. $3,250Question6The per-week demand for use of the Golden Gate Bridge in San Franciscois P = 12 – 0.15Q during peak traffic periods and P = 9 – 0.1Q during offpeak hours, where Q is the number of cars crossing the bridge inthousands and P is the toll in dollars. If the marginal congestion cost ofusing the bridge is MC = 5 + 0.2Q, what is the optimal peak load toll forcrossing the bridge?Select one:A. 6.5B. 8.0C. 8.7D. 9.9E. 10.6Question7When an electrical utility charges higher prices during the day than atnight, it is practicing:Select one:A. peak load pricingB. first-degree price discriminationC. second-degree price discriminationD. third-degree price discriminationE. fourth-degree price discriminationQuestion8In the model of monopolistic competition, firms produce a:Select one:A. standardized product with considerable control over priceB. differentiated product with considerable control over priceC. standardized product with no control over priceD. differentiated product with no control over priceE. differentiated product with some control over priceQuestion9In the model of monopolistic competition, there can be short-run:Select one:A. losses or profits, but there must be profits in long-run equilibriumB. profits, but there must be losses in long-run equilibriumC. losses or profits, but there must be losses in long-run equilibriumD. losses or profits, but there must be neither profits nor losses in long-runequilibriumE. losses, but there must be profits in long-run equilibriumQuestion10The ABC Company estimates that a newspaper advertising campaignwould cost $25,000 and would generate $35,000 in new revenues. Thefirm should begin this campaign as long as:Select one:A. price elasticity of demand is at least 2.5 (in absolute value)B. price elasticity of supply is 1C. price elasticity of demand is at least 1.4 (in absolute value)D. marginal cost of production is no more than $25,000E. price elasticity of supply is 1.4