BU 224 Week 10 Quiz | Final Exam | Assignment Help | Purdue university Global
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- 31 Jan 2020
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BU 224 Week 10 Quiz | Final Exam | Assignment Help | Purdue university Global
Question 1
Governmental pricing
regulation of a monopoly should strive to accomplish which of the following?
Question options:
a) Setting a legal price ceiling equal to
the monopoly’s lowest average variable cost.
b) Setting a legal price ceiling equal to
the monopoly’s lowest average total cost.
c) Setting a legal price ceiling below the
monopoly’s lowest average total cost.
d) Setting a legal price ceiling below the
monopoly’s lowest average variable cost.
e) Setting a legal price ceiling above the
monopoly’s lowest average total cost.
Question 2
For a monopoly, what is
the price effect?
Question options:
a) The change in total revenue caused by
the new customers now paying the old price.
b) The change in marginal revenue caused by
the new customers now paying the new price.
c) The change in total revenue caused by
the new customers now paying the new price.
d) The change in total revenue caused by old
customers now paying the new price.
e) The change in marginal revenue caused by
old customers now paying the new price.
Table 2 shows Media
Cable’s demand table, total revenue, and marginal revenue at each price. What
is the price effect of reducing the price from $100 to $80?
Table 2
Table 2
Price |
Amount Demanded |
Total Revenue |
Marginal Revenue |
$160 |
0 |
$0 |
n/a |
$130 |
90 |
$11,700 |
$130.00 |
$100 |
200 |
$20,000 |
$75.45 |
$80 |
350 |
$28,000 |
$53.33 |
$40 |
600 |
$24,000 |
-$16.00 |
$0 |
850 |
$0 |
-$96.00 |
Question options:
a) $4,000
b) -$20,000
c) $28,000
d) -$4,000
e) $12,000
Question 4
Media Cable, a typical
utility based monopoly, provides cable service in a rural community. Table 1
shows the demand that Media Cable experiences at each price and Graph 1 depicts
Media Cable’s demand curve. Why does such a monopoly face a downward sloping
demand curve?
Table 1
Price |
Amount Demanded |
$160 |
0 |
$130 |
100 |
$100 |
200 |
$80 |
400 |
$40 |
600 |
$0 |
850 |
Graph 1
Question options:
a) More people are going to want to pay the
minimum price offered. If they are offering free cable then many people will
want to take advantage of that.
b) More people are willing to pay for cable
as the price of cable service decreases.
c) Because the price Media Cable expects to
receive for its output will not remain constant as output increases.
d) Because fewer people are willing to pay a
higher price. More people are willing to pay a lower price but Media Cable is
less willing to provide the service at the lower price.
e) Because Media Cable is the only producer
of cable in this market, so its demand curve is the market demand curve for the
entire industry.
Question 5
Table 2 shows Media
Cable’s demand table, total revenue, and marginal revenue at each price. What
is the quantity effect of reducing the price from $100 to $80?
Table 2
Price |
Amount Demanded |
Total Revenue |
Marginal Revenue |
$160 |
0 |
$0 |
n/a |
$130 |
90 |
$11,700 |
$130.00 |
$100 |
200 |
$20,000 |
$75.45 |
$80 |
350 |
$28,000 |
$53.33 |
$40 |
600 |
$24,000 |
-$16.00 |
$0 |
850 |
$0 |
-$96.00 |
Question options:
a) $4,000
b) -$20,000
c) $28,000
d) -$4,000
e) $12,000
Question 6
Table A shows the
pricing options for two hair salons, one operated by Sue and the other by Jane,
as an oligopoly in a rural market. Which of the following pricing strategies
does Table 3 depict?
Table A
Pricing
strategies for Sue’s Hair Salon when charging the LOW Price |
Pricing
strategies for Sue’s Hair Salon when charging the HIGH Price |
If Sue and Jane both
charge LOW price, BOTH get $400 each |
If Sue charges the
HIGH price and Jane charges the LOW price, Sue GETS $0, and Jane gets $800 |
If Jane charges HIGH
price and Sue charges LOW price, Jane gets $0 and Sue gets $800 |
If Sue and Jane both
charge the HIGH price, BOTH get $600 each |
TABLE 3 |
First Period
Choose High or low price |
First Period
Profit |
Second Period
Choose High or low price |
Second Period
Profit |
Total Profit
in both periods |
Sue |
High |
$0 |
Low |
$400 |
$400 |
Jane |
Low |
$800 |
Low |
$400 |
$1,200 |
Question options:
a) Sue always plays “Tit-for-Tat” and Jane
always plays “Tit-for-Tat.”
b) Sue always plays “Tit-for-Tat” and Jane
always chooses the “Low” price.
c) Jane always plays “Tit-for-Tat” and Sue
always chooses the “Low” price.
d) Jane always chooses the “Low” price and
Sue always chooses the “Low” price.
e) When there is only a single period in
which to choose and Jane does not know what Sue will do, Jane always chooses
the Nash Non cooperative Equilibrium price strategy.
Table B shows the
pricing options for two medical doctors operating as an oligopoly in a rural
market. Which of the following pricing strategies does Table 10 depict?
Table B
Pricing
strategies Dr. Good charges LOW Price |
Pricing
strategies Dr. Good charges HIGH Price |
If Dr. Good and Dr.
Fine both charge LOW price, BOTH get $350 each |
If Dr. Good charges
the HIGH PRICE and Dr. Fine charges the LOW PRICE, Dr. Good GETS $0, and Dr.
Fine gets $700 |
If Dr. Fine charges
HIGH PRICE and Dr. Good charges LOW PRICE, Dr. Fine gets $0 and Dr. Good gets
$700 |
If Dr. Good and Dr.
Fine both charge the HIGH PRICE, BOTH get $500 each |
TABLE
10 |
First Period
Choose High or low price |
First Period Profit |
Second Period
Choose High or low price |
Second Period
Profit |
Total Profit
in both periods |
Dr. Good |
High |
$500 |
High |
$500 |
$1,000 |
Dr. Fine |
High |
$500 |
High |
$500 |
$1,000 |
Question options:
a) Dr. Fine always plays “Tit-for-Tat” and
Dr. Good always plays “Tit-for-Tat.”
b) Dr. Fine always plays “Tit-for-Tat” and
Dr. Good always chooses the “Low” price.
c) Dr. Good always plays “Tit-for-Tat” and
Dr. Fine always chooses the “Low” price.
d) Dr. Good always chooses the “Low” price
and Dr. Fine always chooses the “Low” price.
e) When there is only a single period in
which to choose and Dr. Fine does not know what Dr. Good will do, Dr. Fine
always chooses the Nash No cooperative Equilibrium price strategy.
Table A shows the pricing options for two hair salons, one operated by Sue and the other by Jane, as an oligopoly in a rural market. Which of the following pricing strategies does Table 1a and 1b depict?
Table B
Pricing
strategies Dr. Good charges LOW Price |
Pricing
strategies Dr. Good charges HIGH Price |
If Dr. Good and Dr.
Fine both charge LOW price, BOTH get $350 each |
If Dr. Good charges
the HIGH PRICE and Dr. Fine charges the LOW PRICE, Dr. Good GETS $0, and Dr.
Fine gets $700 |
If Dr. Fine charges
HIGH PRICE and Dr. Good charges LOW PRICE, Dr. Fine gets $0 and Dr. Good gets
$700 |
If Dr. Good and Dr.
Fine both charge the HIGH PRICE, BOTH get $500 each |
TABLE
10 |
First Period
Choose High or low price |
First Period Profit |
Second Period
Choose High or low price |
Second Period
Profit |
Total Profit
in both periods |
Dr. Good |
High |
$500 |
High |
$500 |
$1,000 |
Dr. Fine |
High |
$500 |
High |
$500 |
$1,000 |
Question options:
a) Sue always plays “Tit-for-Tat” and Jane
always plays “Tit-for-Tat.”
b) Sue always plays “Tit-for-Tat” and Jane
always chooses the “Low” price.
c) Jane always plays “Tit-for-Tat” and Sue
always chooses the “Low” price.
d) Jane always chooses the “Low” price and
Sue always chooses the “Low” price.
e) When there is only a single period in
which to choose and Jane does not know what Sue will do, Jane always chooses
the Nash Non cooperative Equilibrium price strategy.
Question 9
Table B shows the
pricing options for two medical doctors operating as an oligopoly in a rural
market. Which of the following pricing strategies does Table 9 depict?
Table B
Pricing
strategies Dr. Good charges LOW Price |
Pricing
strategies Dr. Good charges HIGH Price |
If Dr. Good and Dr.
Fine both charge LOW price, BOTH get $350 each |
If Dr. Good charges
the HIGH PRICE and Dr. Fine charges the LOW PRICE, Dr. Good GETS $0, and Dr.
Fine gets $700 |
If Dr. Fine charges
HIGH PRICE and Dr. Good charges LOW PRICE, Dr. Fine gets $0 and Dr. Good gets
$700 |
If Dr. Good and Dr.
Fine both charge the HIGH PRICE, BOTH get $500 each |
TABLE
10 |
First Period
Choose High or low price |
First Period Profit |
Second Period
Choose High or low price |
Second Period
Profit |
Total Profit
in both periods |
Dr. Good |
High |
$500 |
High |
$500 |
$1,000 |
Dr. Fine |
High |
$500 |
High |
$500 |
$1,000 |
a) Dr. Fine always plays “Tit-for-Tat” and
Dr. Good always plays “Tit-for-Tat.”
b) Dr. Fine always plays “Tit-for-Tat” and
Dr. Good always chooses the “Low” price.
c) Dr. Good always plays “Tit-for-Tat” and
Dr. Fine always chooses the “Low” price.
d) Dr. Good always chooses the “Low” price
and Dr. Fine always chooses the “Low” price.
e) When there is only a single period in
which to choose and Dr. Fine does not know what Dr. Good will do, Dr. Fine
always chooses the Nash Non cooperative Equilibrium price strategy.
Table A shows the
pricing options for two hair salons, one operated by Sue and the other by Jane,
as an oligopoly in a rural market. Which of the following pricing strategies
does Table 4 depict?
Table B
Pricing
strategies Dr. Good charges LOW Price |
Pricing
strategies Dr. Good charges HIGH Price |
If Dr. Good and Dr.
Fine both charge LOW price, BOTH get $350 each |
If Dr. Good charges
the HIGH PRICE and Dr. Fine charges the LOW PRICE, Dr. Good GETS $0, and Dr.
Fine gets $700 |
If Dr. Fine charges
HIGH PRICE and Dr. Good charges LOW PRICE, Dr. Fine gets $0 and Dr. Good gets
$700 |
If Dr. Good and Dr.
Fine both charge the HIGH PRICE, BOTH get $500 each |
TABLE
10 |
First Period
Choose High or low price |
First Period Profit |
Second Period
Choose High or low price |
Second Period
Profit |
Total Profit
in both periods |
Dr. Good |
High |
$500 |
High |
$500 |
$1,000 |
Dr. Fine |
High |
$500 |
High |
$500 |
$1,000 |
Question options:
a) Sue always plays “Tit-for-Tat” and Jane
always plays “Tit-for-Tat.”
b) Sue always plays “Tit-for-Tat” and Jane
always chooses the “Low” price.
c) Jane always plays “Tit-for-Tat” and Sue
always chooses the “Low” price.
d) Jane always chooses the “Low” price and
Sue always chooses the “Low” price.
e) When there is only a single period in
which to choose and Jane does not know what Sue will do, Jane always chooses
the Nash no cooperative Equilibrium price strategy.
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