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CHAPTER 11 Pricing with Market Power TEST BANK 2021

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1. Which of the following strategies are used by business firms to capture consumer surplus? a. price discrimination. b. bundling. c. two-part tariffs. d. all of the above. easy 2. Rather than ch argi... ng a single price to all customers, a firm charges a higher price to men and a lower price to women. By engaging in this practice, the firm: a. is trying to reduce its costs and therefore increase its profit. b. is engaging in an illegal activity that is prohibited by the Sherman Antitrust Act. c. is attempting to convert producer surplus into consumer surplus. d. is attempting to convert consumer surplus into producer surplus. e. both (a) and (c) are correct. Section 11.2 easy 3. An electric power company uses block pricing for electricity sales. Block pricing is an example of a. first-degree price discrimination. b. second-degree price discrimination. c. third-degree price discrimination. d. Block pricing is not a type of price discrimination. easy 4. When a firm charges each customer the maximum price that the customer is willing to pay, the firm a. engages in a discrete pricing strategy. b. charges the average reservation price. c. engages in second-degree price discrimination. d. engages in first-degree price discrimination. easy 5. The maximum price that a consumer is willing to pay for each unit bought is the ______________ price. a. market b. reservation c. consumer surplus d. auction e. choke easy 6. Second-degree price discrimination is the practice of charging a. the reservation price to each customer. b. different prices for different blocks of the same good or service. c. different groups of customers different prices for the same products. d. each customer the maximum price that he or she is willing to pay. [Show More]

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