Quiz_160 - 18 :alowerpricetothose thefront,aroundthestage. A

Quiz_160 - 18 :alowerpricetothose thefront,aroundthestage. A

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18) The Athenian Theatre sells play tickets for the same play at different prices: a lower price to thosewho opt for the seats at the back of the theatre and a higher price for those who purchase seats inthe front, around the stage. Which of the following statements is true?A) This is an example of product differentiation but not price discrimination.B) Charging two different prices is an effective way to avoid an excess demand for play tickets;the higher price lowers quantity demanded to some extent.C) The theatre practices first-degree price discrimination by setting prices based on willingnessto pay.D) Since the cost of producing the play does not change with the seating configuration, this isevidence of price discrimination based on market segmentation.Answer: A18)Diff: 2Page Ref: 521-522/521-522Topic: The Law of One PriceLearning Outcome: Micro 15: Discuss the role of differentiation in monopolistic competition in comparison toother market conditionsAACSB: Reflective ThinkingTRUE/FALSE. WriteʹTʹif the statement is true andʹFʹif the statement is false.19) The act of buying a product at a low price in one market and reselling the product at a higher pricein another market is called arbitrage.19)Answer:TrueFalseDiff: 1Page Ref: 520/520Topic: ArbitrageLearning Outcome: Micro 14: Discuss production and pricing decisions within monopolies and how publicpolicies affect monopoliesAACSB: Reflective Thinking20) The law of one price states that identical products should sell for the same price everywhere aslong as transactions costs are zero.20)Answer:TrueFalseDiff: 1Page Ref: 520/520Topic: The Law of One PriceLearning Outcome: Micro 15: Discuss the role of differentiation in monopolistic competition in comparison toother market conditionsAACSB: Reflective Thinking21) In a perfectly competitive market, in the long run, arbitrage profits will be bid away.21)Answer:TrueFalseDiff: 2Page Ref: 520/520Topic: ArbitrageLearning Outcome: Micro 13: Explain the relationship between production and profits under perfectcompetitionAACSB: Reflective Thinking22) Differentiating products to suit customersʹ

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