Quiz_166 - 91 .ToniMorrisonsbook AMercy...

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91) Book publishers often use price discrimination across time to increase profits. Toni Morrison ʹ s book, A Mercy, was published as a hardcover edition in November 2008 at a price of $23.95. In August 2009, the paperback version was published at a price of $15.00. Assume that 100,000 hardcover books were sold to hard - core Toni Morrison fans in November 2008, and 400,000 paperback books were sold to casual readers in August 2009. Illustrate each of these situations graphically. Assume that the marginal cost of the hardcover version is $2.00 and the marginal cost of the paperback version is $0.75. Answer: Diff: 2 Page Ref: 529 - 530/529 - 530 Topic: Price Discrimination Across Time Learning Outcome: Micro 14: Discuss production and pricing decisions within monopolies and how public policies affect monopolies AACSB: Reflective Thinking MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question. 92) Some firms practice odd pricing because A) it is too difficult for sellers to reeducate buyers into accepting even prices. B) it lowers transactions costs. C) it is a way to price discriminate. D) they believe that customers will buy a larger quantity with an odd price. 92) Answer: D Diff: 2 Page Ref: 531 - 532/531 - 532 Topic: Odd Pricing Learning Outcome: Micro 16: Discuss the functions of cooperation, competition, and public policies in oligopolies AACSB: Reflective Thinking 93) Suppose the per - unit production cost of a book is $4.00 and the retail price is $32. If the book publisher sells books to a bookstore at a 40 percent discount, what is the amount of the publisher ʹ s markup per book? Assume that bookstores sell books at the retail price. 93) Diff: 2 Page Ref: 532 - 533/532 - 533 Topic: Cost - Plus Pricing Learning Outcome: Micro 16: Discuss the functions of cooperation, competition, and public policies in oligopolies AACSB: Reflective Thinking 30
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