Homework Answers
Limit pricing is a strategy which is used by incumbent firm to deter entry of new firm. It's used to protect a firms monopoly power and supernormal profit. The limit price is below the monopoly price.
The limit price is below the normal monopoly price.
The underlying motivation of limit driving is to reduce the investors for new firms to enter the industry.
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Which of the following is correct regarding the limit pricing model? There is more than one...
Which of the following is correct regarding penetration pricing? There is more than one answer to...
Which of the following is correct regarding penetration pricing? There is more than one answer to this question. You must mark all of the answers to receive full credit for this question. It is a temporary pricing strategy intended to quickly attract consumers to a firm. It is a strategy that is commonly found among perfectly competitive firms. It is used by firms to overcome network effects of well- established firms. It is used by firms with a long history...
Question 1: An incumbent sells steel and faces a potential entrant. Inverse demand curve for steel...
Question 1: An incumbent sells steel and faces a potential entrant. Inverse demand curve for steel sales is given by by P = 400-Q, where Q is the total amount sold by both firms. The marginal cost to produce one unit of steel is MC = 100 The entrant incurs fixed costs of F. (a) What are the Cournot prices and quantities in the market, assuming the entrant enters? (b) What are the Stackelberg prices and quantities in the market,...
Question 9 1 pts Which of the following is correct regarding penetration pricing? There is more...
Question 9 1 pts Which of the following is correct regarding penetration pricing? There is more than one answer to this question. You must mark all of the answers to receive full credit for this question. It is a strategy that is commonly found among perfectly competitive firms. It is used by firms with a long history in an industry that try to capture sales from new firms that are entering the industry. It is a strategy that is defined...
Which of the following statements is correct regarding the peak-load pricing strategy? The off-peak price and...
Which of the following statements is correct regarding the peak-load pricing strategy? The off-peak price and off-peak quantity are both higher than the peak price and peak quantity. The peak price and peak quantity are both higher than the off-peak price and off-peak quantity. The peak price is lower than the off-peak price, but the peak quantity is higher than the off-peak quantity. The peak price is higher than the off-peak price, but the peak quantity is lower than the...
Which of the following statements is correct regarding the Sweezy model of oligopoly? Competitors match price...
Which of the following statements is correct regarding the Sweezy model of oligopoly? Competitors match price increases but do not match price decreases. The flatter portion of the demand curve corresponds to the quantity range where competitors match price changes. The firm faces more elastic demand when it lowers its price than when it raises its price. None of the statements listed is correct. The marginal revenue curve of the firm is horizontal. Question 22 1 pts Assume that the...
Question 11 (1 point) Which of the following is correct regarding the market pricing method of...
Question 11 (1 point) Which of the following is correct regarding the market pricing method of price setting? A key consideration when doing market pricing is to determine what percent above cost the price will be. The market pricing method is often ineffective for new technology products where customers lack understanding of the product. Market pricing relies on evaluating what competitors are charging in the market in order to set price. Break-even pricing falls within the market pricing method.
are making an economic Today, firms in a perfectly competitive market run, firms will profit. In...
are making an economic Today, firms in a perfectly competitive market run, firms will profit. In the long firns in a perfectly competitive market are making the market until all firms in the market onomic e) exit, producing at the minimum point on their long-run average cost d) a) exit; covering only their total fixed costs b) enter, making zero economic profit enter, making zero normal profit an economic profit when new firms enter 46. The firms in a perfectly...
Which of the following statements regarding the trucking industry is correct? Question 1 options: Over the...
Which of the following statements regarding the trucking industry is correct? Question 1 options: Over the past several years, losses and exit from the industry have substantially reduced the degree of competition in the industry. The trucking industry most closely resembles an oligopoly. Even though there is a high degree of competition, firms in the trucking industry are able to sustain positive economic profits as a result of a substantial degree of product differentiation. Between 1999 and 2007, the behavior...
1) Which of the following statements regarding a monopolist is correct? A) A monopolist will only...
1) Which of the following statements regarding a monopolist is correct? A) A monopolist will only produce an output where the demand is perfectly elastic, B) A monopolist will only produce an output where the demand is elastic C) A monopolist will only produce an output where the demand is inelastic. D) A monopolist will only produce an output where the demand is unitary elastic. 2) When is a monopolist's total revenue at a maximum? A) When its marginal revenue...
Predatory Pricing Which of the followings is not the purpose of predatory pricing? A To drive...
Predatory Pricing Which of the followings is not the purpose of predatory pricing? A To drive competitors out of a market B To prevent entry by potential rivals C To increase its own market power O D to increase output and lower prices Economies and Diseconomies of Scale When a firm gets so large that coordination and management of workers and other inputs becomes costly and difficult, it is experiencing which of the following? O A Diseconomies of scale O...
Which of the following is correct regarding penetration pricing? There is more than one answer to this question. You must mark all of the answers to receive full credit for this question. It is a temporary pricing strategy intended to quickly attract consumers to a firm. It is a strategy that is commonly found among perfectly competitive firms. It is used by firms to overcome network effects of well- established firms. It is used by firms with a long history...
Question 1: An incumbent sells steel and faces a potential entrant. Inverse demand curve for steel sales is given by by P = 400-Q, where Q is the total amount sold by both firms. The marginal cost to produce one unit of steel is MC = 100 The entrant incurs fixed costs of F. (a) What are the Cournot prices and quantities in the market, assuming the entrant enters? (b) What are the Stackelberg prices and quantities in the market,...
Question 9 1 pts Which of the following is correct regarding penetration pricing? There is more than one answer to this question. You must mark all of the answers to receive full credit for this question. It is a strategy that is commonly found among perfectly competitive firms. It is used by firms with a long history in an industry that try to capture sales from new firms that are entering the industry. It is a strategy that is defined...
Which of the following statements is correct regarding the peak-load pricing strategy? The off-peak price and off-peak quantity are both higher than the peak price and peak quantity. The peak price and peak quantity are both higher than the off-peak price and off-peak quantity. The peak price is lower than the off-peak price, but the peak quantity is higher than the off-peak quantity. The peak price is higher than the off-peak price, but the peak quantity is lower than the...
Which of the following statements is correct regarding the Sweezy model of oligopoly? Competitors match price increases but do not match price decreases. The flatter portion of the demand curve corresponds to the quantity range where competitors match price changes. The firm faces more elastic demand when it lowers its price than when it raises its price. None of the statements listed is correct. The marginal revenue curve of the firm is horizontal. Question 22 1 pts Assume that the...
Question 11 (1 point) Which of the following is correct regarding the market pricing method of price setting? A key consideration when doing market pricing is to determine what percent above cost the price will be. The market pricing method is often ineffective for new technology products where customers lack understanding of the product. Market pricing relies on evaluating what competitors are charging in the market in order to set price. Break-even pricing falls within the market pricing method.
are making an economic Today, firms in a perfectly competitive market run, firms will profit. In the long firns in a perfectly competitive market are making the market until all firms in the market onomic e) exit, producing at the minimum point on their long-run average cost d) a) exit; covering only their total fixed costs b) enter, making zero economic profit enter, making zero normal profit an economic profit when new firms enter 46. The firms in a perfectly...
1) Which of the following statements regarding a monopolist is correct? A) A monopolist will only produce an output where the demand is perfectly elastic, B) A monopolist will only produce an output where the demand is elastic C) A monopolist will only produce an output where the demand is inelastic. D) A monopolist will only produce an output where the demand is unitary elastic. 2) When is a monopolist's total revenue at a maximum? A) When its marginal revenue...
Predatory Pricing Which of the followings is not the purpose of predatory pricing? A To drive competitors out of a market B To prevent entry by potential rivals C To increase its own market power O D to increase output and lower prices Economies and Diseconomies of Scale When a firm gets so large that coordination and management of workers and other inputs becomes costly and difficult, it is experiencing which of the following? O A Diseconomies of scale O...
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