econ 201 ch 17 quiz

Which criteria for market segmentation would be easiest to use for an online retailer? A. Account address B. Customer height C. Income D. Student or nonstudent status

account address

A useful rule of thumb is that the higher the marginal benefit a consumer gains from a product, the A. higher the buyers' reservation price will be. B. lower the consumer's demand for the product will be. C. more price-sensitive the consumer will be. D. more the consumer will seek substitutes for the product.

higher the buyers' reservation price will be

A certain shampoo is on sale twice a year, every year. This is an example of a seller using _____ as a form of _____ to achieve price discrimination. A. alternate versions; group pricing B. price fluctuation; the hurdle method C. price fluctuation; group pricing D. alternate versions; the hurdle method

price fluctuation; the hurdle method

A price-discriminating company can attract more customers by _____ price, as long as _____. A. raising; the price is above marginal benefit and below marginal cost B. reducing; the price is above marginal benefit and below marginal cost C. raising; new customers are convinced to pay the price D. reducing; the price is above its marginal cost

reducing; the price is above its marginal cost

When a seller offers lower prices to those buyers who are willing to overcome some obstacle to get it, the seller is using _____ to get buyers to reveal their _____. A. the hurdle method; reservation price B. impediment pricing; marginal benefit C. segment blocking; marginal benefit D. the hurdle method; marginal cost

the hurdle method; reservation price

Price discrimination leads to _____ than a one-price system. A. fewer buyers B. a lower average cost C. a more efficient output D. a lower average price

a more efficient output

When price discriminating, a company owner should set price _____ for each customer. A. equal to marginal cost B. at or just below the marginal benefit C. at the competitive market equilibrium D. no higher than marginal cost

at or just below the marginal benefit

When a company practices price discrimination, it will keep adding customers until the point where the A. company's marginal cost equals the last customer's marginal benefit. B. last customer's marginal benefit exceeds the company's marginal cost. C. last customer's marginal benefit equals the marginal quantity. D. company's marginal cost exceeds the last customer's marginal benefit.

company's marginal cost equals the last customer's marginal benefit

Consumer backlash against price discrimination often focuses on the issue of A. fairness. B. honesty. C. profit. D. consumers' needs versus their wants.

fairness

A furniture store owner allows its salespersons to lower a price by up to ten percent to gain a sale if the buyer appears price sensitive. The owner also instructs salespersons to confer with management about the possibility of higher discounts if needed to make a sale. This example of individually negotiated prices is a form of price discrimination known as A. haggling. B. bundling. C. alternate versions. D. bad service.

haggling

Marta owns a food truck. Which of the following would limit Marta's ability to price discriminate? A. Marta has little understanding of how much each customer values her product. B. Marta's product is good only if it is consumed immediately, making it difficult to store for resale. C. Marta is facing rising costs. D. Marta has considerable market power because she is the only seller in town of of that kind of food.

marta has little understanding of how much each customer values her product

Which of the following is an example of a company practicing price discrimination? A. A restaurant charges different prices for fountain drinks based on their size. B. Most passengers traveling on an airplane pay different prices for their tickets. C. The average price of a haircut is $20 in Dayton and $30 in Cincinnati. D. Johann's bakery charges $2 for a cookie, and Bella's bakery charges $3 for an identical cookie.

most passengers traveling on an airplane pay different prices for their tickets

Sun Do sells key chains with leather fobs for $12 and $9. The key chains are very similar and have identical manufacturing costs. The difference is that the stitching on the leather fob is in a less precise pattern on the $9 key chain than it is on the $12 key chains. What approach to price discrimination is Sun Do using? A. Offering imperfect goods as part of the hurdle method. B. Offering alternate versions through timing as part of the hurdle method. C. Shopping around as a form of group pricing. D. Segmenting the market through bad service.

offering imperfect goods as part of the hurdle method

Corinne gives private art lessons to children. She wants to price discriminate based on the household income of her students. She does not know the exact household income of her students but wants to estimate it, to put them into different price segments. What easily verifiable measure of income could she use? A. Household income taxes B. Year in school C. Child's participation in sports D. Public or private school attendance

public or private school attendance

Bayside Shoe Shop offers a BOGO (buy one, get one) special where customers can buy one pair at full price and get another pair at half-price. This form of price discrimination is referred to as A. quantity discount. B. bad service. C. group pricing. D. fluctuating prices.

quantity discount

Selling alternative versions of a product at different prices is a way to identify the _____ of customers and charge them different prices. A. observable differences B. marginal cost C. reservation price D. size of the population

reservation price

Which of the following is NOT an example of the hurdle method of price discrimination? A. Offering different versions of a product that sell for different prices. B. Bundling to get a second good at a lower price. C. Segmenting the market into identifiable groups with different prices. D. Making customers put extra effort to get a lower price on a product.

segmenting the market into identifiable groups with different prices

What factor determines how many segments to divide your demand in for group pricing? A. Whether the product is a tangible good or an intangible service. B. The ability of the company to identify segments with similar reservation price. C. The amount of consumer information available to the company. D. The similarity of demand across segments.

the amount of consumer information available to the company

Price discrimination can be successful only if A. the company lacks market power. B. the market is highly competitive. C. the product cannot be resold. D. there are many sellers.

the product cannot be resold

Hassan is a student who received a coupon to buy pizza from Pizza House at $4 off the regular price. Students at Hassan's school seem to receive the coupons frequently. Which of the following is an assumption that the owners of Pizza House are making about students at Hassan's school? A. Their demand for pizza is highly inelastic. B. They have a high reservation price for pizza. C. They are price-sensitive. D. Their marginal benefit from pizza is very high.

they are price-sensitive