Question

39. Microsoft sets prices for its new line of computers, and Dell and HP follow. This practice is known as A) B) C) D) antitrust pricing price extortion price leadership kinked demand behavior 40. To be binding, a price ceiling must be set at a price: A) lower than the equilibrium price. B) higher than the equilibrium price. C) the same as the equilibrium price. D) any price ceiling is binding. 41. The profit-maximizing rule MR- MC is: followed by a monopoly but not by a perfectly competitive firm. followed by a perfectly competitive firm but not by a monopoly. followed by all types of firms. not followed by a monopoly because it would reduce economic profit to zeno. А) B) C) D) 42. Some economists think that advertising is a waste of resources because: A) rational consumers end up spending too little on brand names B) consumers might be irrational and buy things they do not need. C) advertising creates excess capacity D) advertising leads to lower costs for goods and services. When price discrimination occurs, the producer's profit is: 43. A) the same as that which occurs when the producer charges each custiomer the same profit maximizing B) more than that which occurs when the producer charges each customer the same profit maximizing C) less than that which occurs when the producer charges each customer the same profit maximizing D) price where marginal revenue equals marginal cost. price where marginal revenue equals marginal cost. price where marginal revenue equals marginal cost. the same as that which occurs when the producer charges each customer the same profit maximizing price where marginal revenue equals average total cost. Among the drawbacks of brand names is the fact that they: A) may encourage the consumption of expensive substitutes for generic items. B) provide some assurance of consistency of quality C) convey information about the nature of the product. D) indicate that the seller is engaged in repeated interaction with its customers. 44. 45. Assuming that paperback books are an inferior good, which statement could cause a decrease in demand for paperback books? A) An increase in incomes B) A decrease in incomes C) A higher price for hardcover books D) A higher price for e-Books
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Answer 1

39) Microsoft said prices for its new line of computers, and Dell and HP follow. This practice is known as price leadership. So option C is the correct answer.

40) To be binding, a price ceiling must be said at a price lower than the equilibrium price. So option A is the correct answer.

41) The profit maximising rule MR equals to MC is followed by all types of forms. So option C is the correct answer.

42) some economists think that advertising is a waste of resources because national consumers end up spending too little on brand names. So option A is the correct answer.

44) Among the drawbacks of brand names is the fact that they may encourage the contention of expensive substitutes for generic items. So option a is the correct answer.

45) assuming that paperback books are an inferior code, an increase in income could cause a decrease in demand for paperback books. So option A is the correct answer.